Lake America and the Tariff War
It looks like the Canadian economy is in for a pretty rough time. Our next-door neighbour, our biggest trading partner, and former closest ally, now seems to hate our guts and has applied 50% tariffs on $28 billion dollars of Canadian exports. They will also apply 50% tariffs on Canadian made automobiles and parts starting in 2027. This will really hurt the Canadian economy because 70% of our exports go to the US. In return Canada has decided to levy countervailing tariffs on selected US goods. This will hurt some US exporters, but will also increase inflation in Canada since it will increase the price of US goods imported into Canada.
The reason for all this is that trade talks have broken down. Canada walked away from the talks when US negotiators introduced last minute requirements to remove trucks from the deal, restrict Canada’s trade deals with other countries, and remove regulations to protect the French culture. Canada regarded the trade restrictions and removal of language regulations, as direct attacks on Canadian sovereinty.
Donald Trump is the root cause of all this insanity. Since the start of his second term, all trade talks between the two countries have been conducted under the threat of huge tariffs from the US. He started his second term with the pre-emptive strike of imposing a 25% tariff on all goods from Canada and Mexico. The “trumped up” reason for these tariffs was apparently to prevent illegal aliens and fentanyl from crossing the border. They were put on hold for a month and implemented in March 2025, with goods covered by the USMCA trade agreement exempt. Canada retaliated with some tariffs of its own and Ontario placed a 25% surcharge on electricity exports, so Trump put a 50% tariff on Canadian steel and aluminum. This was reduced to 25% when the surcharge on electricity was removed.
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In April 2025, on the so called “Liberation Day”, Trump announced tariffs on the entire world. This caused the stock market to collapse, so he quietly walked most of that back. In June 2025, as trade talks with the new Canadian government were underway, Trump increased the tariffs on Canadian steel and aluminum to 50%, just to help the talks along. The talks ground to a halt under renewed tariff threats and were cancelled by Trump in October 2025, when Ontario ran an ad featuring an old video of Ronald Reagan criticizing tariffs. Trump also blocked the opening of the new Canadian built bridge from Windsor to Detroit.
Trade talks resumed in August 2026, again under the threat of 50% tariffs from the US. These talks collapsed on August 21st and the promised tariffs are now in effect, with Canada’s counter measures coming into effect on September 8th. In a great show of maturity, Trump, the master of the deal, passed an executive order to rename Lake Ontario to Lake America. So, I guess I now live on the shores of Lake America.
How can you have reasonable trade negotiations with someone who thinks renaming a lake is a negotiating tactic?
