In brief
The Trump‑era tariff saga between Canada and the US has escalated into a multi‑year trade war, with U.S. levies on Canadian steel, aluminium, lumber and autos hitting hard, particularly in Ontario. Canada’s own counter‑tariffs target key U.S. exports, disproportionately affecting Ohio, Illinois and Pennsylvania. While the trade fight erodes manufacturing jobs on both sides—about 55,000 in Canada alone—it also forces Canadian firms to diversify, sending goods elsewhere. Despite rising U.S. tariff rates, Canada’s average effective tariff is still lower than many partners, but recent 50% U.S. duties threaten to widen economic gaps further.
These visual sections break down the key figures of the ongoing tariff dispute that started when President Donald Trump opened the U.S. trade wars and hit Canada hard in 2025. Canada’s retaliatory tariffs are aimed at specific U.S. sectors, while Canada sees its own growth diversifying to other markets.
1. Ontario hardest hit
Ontario, home to a large auto and steel sector, suffers the most from U.S. sectoral tariffs. Combined federal and provincial drops have killed tens of thousands of manufacturing jobs since early 2025. Automakers linked to foreign‑owned part suppliers announced layoffs as steel and auto tariffs tightened.
2. Swing states under Canadian retaliation
Canada has hit $28bn of U.S. goods with tariffs, targeting Ohio (12% of its exports), Illinois and Pennsylvania. Ohio faces extra steel and laundry‑machine duties, while Illinois worries about farm equipment hikes.
3. Tariff rates rise but U.S. remains less affected
Canada’s average effective U.S. tariff jumped from 2.9% in June to 5.7% after the latest 50% duties, now eclipsing Mexico’s levels. The U.S. itself faces lower rates than the UK at 6.2% and far below China’s 20.5% statutory average.
4. Canada seeks new markets
U.S. exports now account for more than 70% of Canadian trade, but the tariff war pushes firms toward Europe and Asia. Toronto designer Matteo Sgaramella has moved his trunk shows to Paris, gaining new buyers who champion Canadian products amid U.S. hostility.
5. Jobs, income and future outlook
Both countries see job cuts linked to tariff-induced supply‑chain shocks. Roughly 55,000 Canadian manufacturing jobs disappeared from January 2025 to January 2026, and Canadian economists predict up to 90,000 more could be lost if 50% duties persist. U.S. households could see an $840 increase in average consumer goods prices.
With strong GDP growth noted in Q2 2026 and record foreign‑direct investment inflows, Canada’s leadership hopes to re‑balance trade and invite further investment at the upcoming 2026 Canada Investment Summit.
