How Trump’s Canada Tariffs Could Impact Both the U.S. and Canada

It is not an exit anyone would have expected. Justin Trudeau will end his final days as Canada’s prime minister with the country tossed into economic turmoil if President Trump follows through on his plan Tuesday to impose 25 percent tariffs on Canadian exports.

While Canadian officials have spent much of last week in Washington trying to fend off the president’s tariffs, which will also apply to Mexico, those efforts have so far been futile. If tariffs do go into effect, Canada is poised to retaliate, setting off a trade war.

Mr. Trump has offered various rationales for the tariffs, which were supposed to go into effect at the beginning of February but were suspended for 30 days. He says the United States has been destabilized by large numbers of unauthorized migrants, as well as large quantities of fentanyl, crossing the border from Canada and Mexico. U.S. government statistics do not support either claim.

Mr. Trump has also claimed that Americans “subsidize Canada” by providing hundreds of billions of dollars a year — though he has not provided any evidence — and has urged companies to move their plants out of Canada to the United States. Mr. Trump has complained about Canada’s trade surplus with the United States, which is mostly driven by oil and gas exports and totaled $63 billion last year.

Whatever the reason, there is widespread consensus in Canada that tariffs would inflict major damage on the country’s economy, which is dependent on exports as well as industries that are tightly integrated with the American market.

Jean Simard, the president of the Aluminium Association of Canada, recalled the effect of a 10 percent U.S. tariff on Canadian aluminum exports during the first Trump administration.