Trump's trade war with Canada has backfired in America. Now he has a decisive meeting with Mark Carney

Washington
Cnn
–

Canadian Prime Minister Mark Carney will visit the US President Donald Trump in the White House in one of the most controversial meetings between the leaders of the neighboring countries on Tuesday.

Canada is America's second largest trading partner and one of his closest allies on many fronts, from national security to trade. But Trump's aggressive tariff Blitz has undermined this long -term relationship in recent months and accidentally contributed to Carney to consolidate political power.

In a breathtaking complaint from Trump, Canada's liberal party with Carney won the federal elections last week and brought the newly elected government to a collision course with the Trump administration. In a defiant speech after the election, Carney said: “We are about the shock of American betrayal, but we should never forget the lessons.”

Canada and the United States have had free trade for decades, but Trump's comprehensive tariffs have built up this symbiotic relationship – and the damage that Trump's trade war in America has inflicted in America is also serious.

Minister of Commerce Howard Lutnick told Fox Business on Monday that a contract with Canada was possible, but was “very complex”.

Until February, the two countries were bound to the free trade agreement of the USA-Mexico Canada, a deal that Trump himself mediated during his first term. The Ratified USMCA replaced the North American free trade agreement from the quarter of a century in 2020.

But Trump changed that this year.

At the beginning of March, a tariff of 25% came into force on Mexico and Canada before it was suspended after the leaders from both countries had promised to take more measures to fulfill the flow of fentanyl and illegal immigration to America. For imported goods from Mexico and Canada, however, there is still a tariff of 25% that do not correspond to the USMCA.

Trump has also announced 25% tariffs for all cars, steel and aluminum as well as a tariff for auto parts in recent months.

Canada reacted to Trump's actions with a tariff from 25% to $ 30 billion (or about 22 billion US dollars) worth $ 29.8 billion (approx. 22 billion US dollars) in response to Trumps metal tariffs. Canada also hit tariffs on cars that were imported from the USA.

This trade war has a major impact on both economies.

Canada accounts for 14% of total trade according to state data. Canada is also the top country in which the US goods are exported to 349.4 billion US dollars in 2024, with the greatest exports of energy and cars.

In the meantime, the United States of Canada's top destination for its exports more than three quarters of them, including softwood, steel and aluminum. About 30% of the soft wood wood consumed in the USA are imported, with Canada more than 80% of these imports.

Trump's trade war is already burdening American companies of all sizes. Mary Barra, CEO of General Motors, said in an interview with CNN last week that the tariffs will cost their company between 4 and 5 billion US dollars this year.

At the other end of the spectrum, Beth Fynbo Benike, owner of Baby Products Company, said that a goods container will now cost its inventory almost 230,000 US dollars to arrive on US floor.

The latest beige book report of the Federal Reserve, a regular compilation of survey answers from companies across the country, offered various reports about American companies that notice less Canadian tourists – which takes a hit on their end result.

“Some retailers and hospitality providers in North-Washington and South California reported on a significant decline in cross-border tourism at Canada and Mexico,” the report said.

The Canadians also choose not to buy American products and to avoid California tomatoes for Italian tomatoes, pepperoni from Ohio for meat, which were produced in Ontario and Quebec and Coca Cola for sparkling water.

“As a Canadian, we do not go out and do not try to create fights,” said Dylan Lobo, a inhabitant of Toronto who heads the online directory produced in Canada, to CNN in March. “It's an attack on Canada.”