Trump tariffs, Canadian counter tariffs now in effect as deadline passes

With no indication that U.S. President Donald Trump has reversed course, blanket tariffs have been imposed on Canadian goods — as has a first wave of counter tariffs on some U.S. imports. 

Trump said Monday that his long-threatened trade war is going ahead with 25 per cent levies on most Canadian goods and that they would take effect as of midnight Tuesday.

Prime Minister Justin Trudeau said later on Monday that a first tranche of retaliatory tariffs on U.S. goods would also be going into force at the same time.

"Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures," Trudeau said in a statement late Monday.

"While we urge the U.S. administration to reconsider their tariffs, Canada remains firm in standing up for our economy, our jobs, our workers, and for a fair deal."

Trump said Monday that his long-threatened trade war is going ahead and there's nothing Canada can do to stop it.

The announcement threatens to upend trade relations between two countries that, for decades, were close partners and friends. The tariffs, which will apply to everything Canada sends south, could lead to job losses, economic devastation, higher inflation and hurt feelings on both sides of the border.

Speaking to reporters at the White House Monday afternoon, Trump said the United States has been "a laughingstock for years and years" and he needs to take trade action against its continental neighbours.

Trudeau is scheduled to hold a news conference on Tuesday at 10:30 a.m. ET with several federal cabinet ministers.

Foreign Affairs Minister Mélanie Joly says she and Finance Minister Dominic LeBlanc have been in contact with their American counterparts. Joly says Canada is ready to respond with billions of dollars in retaliatory tariffs if U.S. President Donald Trump imposes his tariffs on Tuesday.  

'No room left,' Trump says. 

The president said he wants to punish Canada for a supposedly lax approach to drugs and migrants, even though data shows a border crackdown is already producing results.

"Very importantly, tomorrow, tariffs, 25 per cent on Canada and 25 per cent on Mexico, and that will start. So, they're gonna have to have a tariff," Trump said.

Asked if there's anything Canada can do to try to hold off the tariffs, Trump said: "No room left for Mexico or Canada. They're all set, they go into effect tomorrow."

Trump said Canada has allowed fentanyl to flood into the U.S. despite his government's own data that shows that claim is grossly overstated. About 19.5 kilograms was seized at the northern border last year compared to 9,570 kilograms at the southwestern border.

"It comes in from Canada and it comes in from Mexico, and that's an important thing to say," he said.

The federal government had prepared a series of countermeasures that were first released when Trump floated his tariff threat last month.

Trudeau said in his statement the first wave will target $30 billion worth of U.S. goods, with further tariffs on $125 billion worth of products going into force in 21 days.

Ontario Premier Doug Ford outlined his plan to 'win this tariff war' if Donald Trump makes good on his threat to impost a 25 per cent tariff on Canadian exports, saying he's willing to act on a range of issues — including, if needed, cutting off energy exports from Ontario 'with a smile on my face.'

Ford would cut off energy 'with a smile on my face'

Ontario Premier Doug Ford said he's willing to do whatever it takes to get Trump to back down.

"If they want to try to annihilate Ontario, I will do anything — including cutting off their energy — with a smile on my face," Ford said during his first news conference since winning a landslide victory in a provincial election last week.

"They need to feel the pain. They want to come at us? We've got to go back twice as hard," Ford said.

Moments after Trump confirmed the tariffs will go ahead, the major stock indexes in Canada and the U.S. plunged — a sign that rattled investors thought Trump might back away from some of his trade threats given just how damaging these levies could be to the American economy.

Trump's tariffs also effectively leave the Canada-U.S.-Mexico Agreement (CUSMA) in tatters, ending decades of free trade in North America.

Bank of Canada warns of 'severe' consequences

Economists have said a tariff this large could plunge the economy into a recession.

In a speech late last month, Bank of Canada Governor Tiff Macklem warned "the economic consequences of a protracted trade conflict would be severe."

"In the pandemic, we had a steep recession followed by a rapid recovery as the economy reopened. This time, if tariffs are long-lasting and broad-based, there won't be a bounce-back," he said. "It's more than a shock — it's a structural change."

The tariff will make some Canadian goods less competitive because American importers will have to pay the 25 per cent levy to bring them into the U.S.

Those added costs could then be passed on to American consumers, pushing up the price of everything from car parts and fertilizer to pharmaceuticals and paper products.

Some importers may decide to drop certain Canadian products altogether, putting pressure on Canadian businesses and the people they employ.

"Open trade between Canada and the United States has benefited both countries, increasing efficiency, spurring investment, boosting productivity and raising standards of living. A significant increase in tariffs will kick all this into reverse," Macklem said.

U.S. trade study could bring more tariffs

Matthew Holmes, executive vice-president and chief of policy at the Canadian Chamber of Commerce, said Trump has already done immeasurable damage to the bilateral trading relationship with his "drip-drip-drip of tariff threats."

"We will have a long road back to Canada and the U.S. being trusted economic partners again," Holmes said.

"The United States and Canada's economic partnership is the envy of the world and brings massive benefits to families and workers in both countries. Every day without tariffs is $3.6 billion in economic wins. But every day with tariff threats makes us weaker as allies," he said.

Trump has presided over a chaotic trade agenda with even his own senior adviser, Commerce Secretary Howard Lutnick, saying earlier Monday he wasn't sure what the president would ultimately do with Canada.

Some of Trump's planned tariffs are earmarked to cajole countries to take action on certain issues, like drugs and migrants, while others, including ones promised for March 12, are designed to torpedo the Canadian steel and aluminum industries to bring production back to the U.S.

Trump has also asked the Commerce Department to do a total review of the country's trading relationships and report back by April 1 — a study that could prompt another layer of tariffs on countries that Trump perceives as ripping off the U.S.

Canada sees results on immigration, drugs

Canada has been racing to show the Americans that it takes Trump's border-related concerns seriously.

The federal government's efforts have produced results with the number of intercepted illegal migrants dropping by some 90 per cent in the last few months alone.

Despite Trump's claims, data from the U.S. Customs and Border Protection (CBP) released earlier this month shows there has also been a significant decrease in seizures of fentanyl coming from Canada.

The CBP's own data registered a 97 per cent drop in January compared to December 2024 at the northern border — evidence, the Canadian government says, that its $1.3-billion border security package is already bearing fruit.

The Canada Border Services Agency (CBSA) reported on Thursday that it and its law enforcement partners have made significant seizures at the border as part of "Operation Blizzard," pulling in fentanyl and fentanyl pills, including busting two U.S. citizens at the Windsor-Detroit Tunnel earlier this month who were carrying enough of the deadly drug to kill an estimated 10,000 people.

Even before these new efforts, Canada represented less than one per cent of all seized fentanyl imports into the U.S., according to federal data.

Some prominent American voices are already speaking out against the president's trade action, including legendary investor Warren Buffett.

Buffett, who at 94 still runs conglomerate Berkshire Hathaway, said it's American consumers who will ultimately pay the price of Trump's tariffs.

"We've had a lot of experience with [tariffs]. They're an act of war, to some degree," he said in an interview with CBS News over the weekend.

"Over time, they're a tax on goods. I mean, the tooth fairy doesn't pay 'em," Buffett said. "And then what? You always have to ask that question in economics. You always say, 'And then what?'"