We've seen this play out before, @stevo004—just on a smaller scale. Back in early 2018, Trump slapped 25% tariffs on Canadian aluminium and steel and threatened to hit Canadian auto exports with the same if Canada retaliated. Trudeau called his bluff, responding with reciprocal tariffs on $12 billion worth of US goods. A year later, once the USMCA (formerly NAFTA) was negotiated, both sides lifted their tariffs.
At this point, it's pretty obvious that Trump sees tariffs as a bargaining tool to extract concessions in trade deals. With USMCA up for renegotiation next year, this just looks like more of the same—a pressure tactic to force Canada and Mexico to the table.
Personally, I think Canada should push back even harder. I like Freeland’s plan to impose 100% tariffs on Tesla, which would hit Trump’s inner circle directly (hello Elon). Canada and Mexico produce about 30% of the USA's cars, so I hope Americans are prepared to be paying tens of thousands more for some of their most popular vehicles (40% of all Chevy Silverados, one of the USA's most popular pickups, are produced in Mexico and Canada). And not only are US citizens paying for the tariffs, but Trump is actually also punishing US companies. They might have factories in Mexico and the USA, but they're still American-owned companies (GM, Ford, Dodge, etc).
In the end, I expect this will all blow over by the end of next year, once USMCA negotiations wrap up. Canada and Mexico will make some minor, face-saving concessions, Trump will declare victory (no matter how small the win), and they’ll all move on.
Same script, different year.
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