Canada could be just a few days away from having 25 percent tariffs on all exports to the United States as Donald Trump becomes president on Jan. 20.
While Canada has attempted to dissuade the United States from imposing the tariffs by boosting border security, the incoming president has reiterated his comments about imposing “substantial” tariffs on Canada.
According to the
Canadian Chamber of Commerce, 1.4 million American jobs are supported by exports to Canada, while 2.3 million Canadian jobs are supported by exports to the United States. Altogether, the two countries conduct two-way trade worth $1.3 trillion every year.
Canada has said it would impose retaliatory tariffs if the United States goes ahead with its tariffs.
The chamber
said 25 percent tariffs could shrink Canada’s GDP by 2.6 percent, costing each household an average of $1,900 per year by making everything from cars to food and energy more expensive.
Of course, the economic impact on Canada would depend on what items would be tariffed and at what percentage, which is unknown at this point.
Back in 2018, Trump put 25 percent tariffs on steel products and 10 percent on aluminum products. In response, Canada slapped 25 percent tariffs on U.S. steel and 10 percent tariffs on aluminum products, as well as 10 percent tariffs on a number of food, household items, and appliances.
During this period, duties Canada collected on imports of steel, aluminum, and other tariffed products from the United States rose from a monthly average of nearly $47 million in 2017 to nearly 190 million. However, duties collected by the United States on Canadian steel and aluminum products rose by a larger amount than the duties Canada collected on these goods, rising from a monthly average of over 24 million in 2017 to $205 million, according to
Statistics Canada.
Canada and the United States came to an
agreement in May 2019 to lift their tariffs.
Breakdown
According to data published by the chamber,
Ontario would be hardest hit by U.S. tariffs, with over $446 billion in trade flowing to and from the United States in 2023. A total of 19,927 businesses and 985,865 Canadian jobs are supported by Ontario’s exports to America, and
officials in the Ontario government have estimated the tariffs could cost between 450,000 to 500,000 jobs in Ontario.
The province’s most valued exports include vehicles and transport, with $70.2 billion in exports to the United States every year, while machinery and electrical parts ($30 billion), base metals ($20.8 billion), prepared foods and beverages ($13.8 billion), and chemicals ($13.5 billion) are also important exports to the country. Both countries’ auto sectors would be impacted by the tariffs, as auto parts cross North American borders up to eight times before a vehicle is fully assembled.
In terms of total trade,
Alberta would be the province that is second-most hard hit by U.S. tariffs, as two-way trade between them amounted to $188 billion in 2023. A total of 355,598 jobs and 5,365 companies are supported by Alberta’s trade with the United States.
Alberta’s largest exports, by a wide margin, is $133.9 billion worth of mineral products including petroleum. Chemicals, live animals and products, plastics and rubber, and machinery and electrical products combined made up just around $17.7 billion of the province’s exports to the United States.
Alberta Premier Danielle Smith has come out against cutting off supplies of energy to the United States, while the federal government has said “all options are on the table” in response to U.S. tariffs. Following a Jan. 15 meeting between Ottawa and the provinces on the tariff threat,
Smith refused to sign the joint statement, citing her opposition to “imposing export tariffs on Alberta energy.”
In 2023,
Alberta accounted for 87 percent of Canadian oil exported to the United States, followed by Saskatchewan with 8.9 percent, Newfoundland and Labrador at 1.9 percent, B.C. at 1.3 percent, and Manitoba at 0.4 percent.
Quebec did a total of $121.5 billion of trade with the United States in 2023, with 487,597 jobs and 9,313 businesses being supported by trade with the country. The majority of Quebec’s exports to the United States, $18.8 billion, were base metals like aluminum and iron ore, while vehicles ($12.7 billion) and machinery and electrical parts ($11.6 billion) were important exports.
British Columbia, meanwhile, did $54.8 billion of trade with the United States, with 273,170 jobs and 6,491 businesses being supported by the country. Mineral products ($6.8 billion), wood and cork products ($5.5 billion), base metals ($3.5 billion), and machinery and electrical products ($3.4 billion) are important exports to the United States.
Manitoba did a total of $41.9 billion in trade with the United States in 2023, with 63,179 jobs being supported by the country, and its main export products being minerals ($4.9 billion), and chemicals ($2.8 billion). Saskatchewan was close behind at $32.2 billion in trade volume supporting 68,969 jobs jobs, and also mainly exporting chemicals ($5.5 billion) and minerals ($5 billion).
The four Atlantic provinces—New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador—did a total of $36.6 billion in trade with the United States in 2023, supporting close to 100,000 jobs. New Brunswick and Newfoundland and Labrador export large amounts of mineral products to the United States ($14 billion), while Nova Scotia mostly exports plastics and rubber ($1.5 billion) and animal products ($1 billion), and P.E.I. exports food products ($1.3 billion).
