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TOPSHOT - US President Donald Trump speaks in the Oval Office of the White House as he announces ... [+] reciprocal tariffs, in Washington, DC, on February 13, 2025. Trump announced that he would impose "reciprocal tariffs" on trading partners, opening new fronts in his trade war. The move would match US tariff rates on imports to the levels that other countries impose on US goods. (Photo by ANDREW CABALLERO-REYNOLDS / AFP) (Photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images)
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Remember when Donald Trump said he’d put off imposing tariffs on Mexico and Canada last month? He said the two allies agreed to deploy more border guards even though they had committed to that during Joe Biden’s term. But now, he’s going through with the tariffs, and for good measure, he includes the European Union.
These tariffs could significantly impact the U.S. economy, especially oil, gas, and renewable energy markets. Increased energy costs might drive inflation, undermining people’s purchasing power and introducing uncertainty into business decisions. Industries dependent on Canadian energy may face higher costs, making them less competitive and potentially resulting in job losses.
The levies will exacerbate tensions between the U.S. and Canada and undermine their mutual interests. “If the United States goes ahead and imposes tariffs, we already shared the details of our plan,” said Canadian Prime Minister Justin Trudeau. “We have $30 billion worth of U.S. products that will be subject to tariffs. And $125 billion of tariffs that will be applied three weeks later. But we don’t want to be in that position.”
Trump’s plan? A 25% tariff on Canadian and Mexican goods entering the United States, although it would be 10% on Canadian oil and gas. He also blurted out at his first cabinet meeting that he would place a 25% on the EU because it tries to “screw” this country, causing the European Commission to say that it will “firmly react.” The EU’s tariffs would take place on April 2.
Before we dive into what all this means, let’s lay out the context:
— According to the United States Trade Representative, the total trade between the United States and Canada in 2024 was roughly $763 billion;
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