President Donald Trump is following through on campaign promises to use tariffs on Canada, Mexico, and China to quell an influx of illegal narcotics and undocumented immigrants. The announcement over the weekend that 25% tariffs would begin Tuesday on imports from North American allies signaled the start of what could be a prolonged trade war between two nations that fuel busy cross-border trucking operations.
“Will there be some pain? Yes, maybe (and maybe not),” Trump wrote on social media Sunday. “But we will make America great again, and it will all be worth the price that must be paid.”
That price includes 25% tariffs on virtually all imported Canadian goods and services except Canadian energy exports, which will be subject to a 10% tariff. Mexico imports will also be subject to 25% levies, while Chinese goods will be taxed 10%.
Trump said repeatedly during his campaign and after his election that if Canada successfully dealt with its leaky border, the tariffs would be shelved. Canada was also warned retaliatory tariffs would increase the tariff rates. But Canada’s outgoing prime minister is retaliating.
Over the weekend, Justin Trudeau announced his government would slap 25% tariffs on $30 billion worth of American goods coming into Canada beginning on February 4.
"We didn't ask for this, but we will not back down in standing up, both for Canadians and for the incredible, successful relationship and partnership between Canada and the United States,” Trudeau said in response to a question about the tariffs.
Items targeted in the first round of Canadian countermeasures include American beer, wine and bourbon, fruits and fruit juices, along with vegetables, perfume, clothing, and shoes. The list also includes major consumer products like household appliances, furniture, sports equipment, materials like lumber and plastics, and much more.
Trudeau said Canada would apply tariffs to an additional $125 billion worth of American imports within 21 days. This interval allows for a public comment period before implementation. It would include products such as passenger vehicles, trucks and buses, steel and aluminum products, specific fruits and vegetables, aerospace products, beef, pork, dairy products, and more. Most of Canada’s targets include goods imported from states that backed Trump in the 2024 election, according to Politico.
“Canada and the U.S. are more than just trading partners. We are highly integrated economies—and this has greatly benefitted both of our countries for more than 150 years," said Dominic LeBlanc, Canada's finance minister. "We want to preserve this relationship, but in the face of the unjustified U.S. tariffs against Canadian goods, we are taking action to protect our economy, our workers, and our businesses. We will always stand for Canada.”
What's behind the tariffs?
The motivation for this trade war has many analysts puzzled, Canadian and American alike. President Trump has been clear from the start that he wants governments in Mexico and Canada to do more to stem the flow of illegal aliens and narcotics, particularly fentanyl, into this country. But is that the real crux of the issue?
Canada claims its contribution to America's fentanyl crisis is minuscule compared to the flow of synthetic opioids across the southern border. U.S. Customs and Border Protection agents last year intercepted more than 21,000 pounds of fentanyl at the southern border, while agents seized just over 40 pounds of the synthetic opioid at the Canadian border.
Doug Ford, the premier of Ontario questioned President Trump's stated reason for imposing the massive tariff on Canada in a CNN interview with Jessica Dean, just hours before Trump brought the hammer down.
"It's really disturbing when President Trump is using fentanyl as a reason, lumping us in with Mexico, when the figures from U.S. Customs is very clear," he said, citing the fraction of Fentanyl that enters the U.S. via Canada compared to Mexico, and noting the more than 55,000 lb. of narcotics—heroin, cocaine, opioids, and more, and illegal firearms—coming into Canada from the U.S.
“Frankly, it was illegal breaking a deal that we had with the USMCA [free trade agreement],” Ford added “And it’s disappointing.”
Canada doesn't look quite as good when it comes to the number of illegal immigrants entering the U.S. at unauthorized points.
Canada's public broadcaster, CBC, reports Customs and Border Protection officers intercepted 19,498 migrants between border posts on the northern border between October 2023 and July 2024.
Numbers from the U.S. Border Patrol at the U.S.-Mexico border are much higher but dropping. The number of illegal migrants intercepted by Border Patrol officers reached a high of 249,743 in December 2023 but dropped to a near-record low of 58,038 in August 2024.
It's worth noting Trump chose to use the International Emergency Economic Powers Act (IEEPA) to impose his tariffs rather than a trade agreement. The current United States-Mexico-Canada Agreement prohibits using economic sanctions or tariffs to resolve trade disputes.
Canada's trucking sector at risk
Canada is the top customer for U.S. goods and services exports and a critical supplier of goods and services integral to the U.S. economy. Canada buys more U.S. goods than China, Japan, France, and the United Kingdom combined.
Canada is the largest export market for 36 states and is among the top three for 46 states, with 43 states exporting over $1 billion annually to Canada.
Every day, over $2.5 billion worth of goods and services cross the border, and Canadian trucks haul more than 65% of that freight by value.
The Canadian trucking industry is facing challenges due to a prolonged freight recession and contested labor practices. Canadian Trucking Alliance, representing more than 4500 carriers and industry suppliers, is imploring the federal government in Ottawa. The leaders of the individual provinces and territories, and officials in Washington to immediately come to the table and end this unwarranted trade conflict.
“This has gotten out of hand,” says CTA president Stephen Laskowski. “The reality is the tariffs are unreasonable [and] out of proportion to the problem. The tariffs are like taking a sledgehammer to crack a nut.
“The Americans clearly believe we are not doing enough to address their concerns," Laskowski said in a statement. "We therefore need Ottawa and Washington to come together to find common solutions to this specific challenge rather than bringing economic chaos to both countries.”
In December, the Government of Canada announced Canada’s Border Plan, which aims to bolster border security and strengthen its immigration system. The plan is backed by an investment of $1.3 billion and built around five pillars:
- Detecting and disrupting fentanyl trade;
- Introducing significant new tools for law enforcement;
- Enhancing operational coordination;
- Increasing information sharing; and
- Minimizing unnecessary border volumes.
Like the CTA, the Private Motor Truck Council of Canada, representing Canada's private carriers, says unjustified tariffs imposed on Canada by President Trump will have severe consequences for both the Canadian and American economies.
"President Trump's tariffs will hurt the populations of both countries, sending consumer prices upwards," said Mike Millian, president of the Private Motor Truck Council of Canada. "This move will cost Canadian jobs and slow down cross-border trade, affecting nearly 120,000 Canadian drivers and their companies who cross the U.S. border regularly."
Millian says although it will hurt, he agrees with the Canadian response with counter-tariffs.
"We can not sit by and not respond when the U.S. administration chooses to ignore a bargained free trade agreement, risking damage to both our economies."
Read more about how Canada is responding to Trump’s tariffs in Fleet Maintenance, a FleetOwner affiliate in Endeavor Business Media’s Commercial Vehicle Group.