Last week, Donald Trump imposed hefty tariffs—25% on most Canadian imports and 10% on energy products, seemingly without cause. He also slapped a similar 25% tariff on goods from Mexico. Canada’s response isn’t just retaliatory; they are strategically targeting regions that support Trump’s base, ensuring that his red-state voters feel the pain.
According to the Washington Post, Mexico has negotiated a 30-day delay on the 25% tariffs Trump introduced on Friday, with talks about Canada also scheduled before similar tariffs go into effect on Tuesday. Trump himself confirmed that these “friendly” discussions with Mexican President Claudia Sheinbaum are happening.
However, if these tariffs go through, it’s hard to see how anyone will come out ahead in this trade debacle. Trump has claimed the tariffs are necessary to tackle the fentanyl issue, but the facts don’t support this. Very little fentanyl comes from Canada, and the opioid crisis is a largely a U.S. problem.
A 25% tariff on Canadian and Mexican goods, plus an additional 10% on Chinese imports, would raise prices across the board on nearly everything consumers buy. And this doesn’t even account for the rising food prices driven by Trump’s immigration policies or his standoff with Taiwan. Together, Canada and Mexico account for 30% of U.S. trade, with China trailing at 11%.
The ripple effects of these tariffs are widespread. Canada is the source of 80% of the potash fertilizer used on American farms. Suddenly, food prices just jumped, and in the worst-case scenario, Canada could redirect its fertilizer to other markets like Brazil, leaving U.S. farms struggling to keep up.
In retaliation, Canada unveiled tariffs on $155 billion worth of U.S. imports, including products like orange juice, sugar, tobacco, bourbon, and firearms. They also targeted farm equipment, which is significant given that many farm implements like John Deere tractors are produced in states such as Iowa, Georgia, Tennessee, and Wisconsin.
Even seemingly unrelated products are affected. For example, Canada has targeted Harley-Davidson, which is made in Wisconsin and Pennsylvania. Though only a small percentage of Harleys are sold in Canada, the U.S. automotive industry relies heavily on parts from both Canada and Mexico. This could drive up prices for all vehicles, including Harleys.
The Wall Street Journal reported that Mexico plans to announce its own list of tariffed U.S. goods, strategically targeting products from Republican-heavy regions. Both Canada and Mexico appear to be working in concert to apply maximum pressure on industries that form the bedrock of Trump’s political base.
In fact, one tactic Mexico is considering is “carousel retaliation,” which would involve rotating tariffs on different U.S. goods over time. This would create instability for U.S. exporters and disrupt key sectors like agriculture, which could push Congress to take action.
It’s no surprise that industries are pushing back. The Chamber of Commerce and the National Association of Manufacturers oppose the tariffs, noting that a third of U.S. factory inputs come from Canada and Mexico. The National Association of Home Builders warns that the costs of housing will rise even further, while the tech industry is raising alarms about the impact on American innovation.
Even Trump seems to realize the potential damage. In a post on Truth Social, he proclaimed, “THIS WILL BE THE GOLDEN AGE OF AMERICA!” but admitted, “WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”
