Trump Expected to Impose Tariffs on Canada, Mexico Starting March 1

U.S. President Donald Trump is expected to announce sweeping tariffs on imports from Canada and Mexico, a move that could reshape North American trade relations. The new tariffs, set to take effect on March 1, will include a mechanism allowing select exemptions for certain imports, according to sources familiar with the matter.

While the final tariff rate remains uncertain, Trump has consistently signaled plans to impose a 25% tariff on specific imports from the two countries. An administration official suggested that exemptions would be “few and far between,” signaling a hardline approach to trade policy.

Canada and the U.S. share one of the world’s largest trading relationships, with goods and services worth approximately $1 trillion annually crossing the border. In 2023 alone, $3.6 billion worth of goods moved between the two nations daily, underscoring the deep economic ties at risk.

The sectors most vulnerable to these tariffs include energy, automotive, and agriculture. Canada exports 80% of its oil and 60% of its natural gas to the U.S., making energy one of the most affected industries. The automotive sector, which relies on a complex supply chain spanning North America, could see increased costs, production slowdowns, and job losses.

Ontario Premier Doug Ford has warned that the tariffs could cost up to 500,000 jobs in his province alone, given the heavy dependence of Ontario’s manufacturing sector on U.S. trade. British Columbia Premier David Eby cautioned that a prolonged trade war could lead to nearly $70 billion in economic losses by 2028. Meanwhile, Newfoundland and Labrador Premier Andrew Furey said thousands more jobs in his province are at stake.

Trump’s “America First” trade policies prioritize domestic manufacturing, but they come at a cost. He has repeatedly claimed that tariffs protect U.S. businesses, despite evidence that they ultimately increase costs for American importers and consumers. Historically, foreign governments do not pay tariffs—American companies importing the goods absorb the cost, often passing it down to consumers.

Prime Minister Justin Trudeau, in the final months of his tenure, has vowed “robust, rapid, and strong” countermeasures should Trump proceed with these tariffs. In December, Canada announced a $1.3 billion border security plan, seemingly in response to Trump’s accusations that Canada has not done enough to curb illegal drugs and migration—claims widely disputed by officials.

Trump has also suggested that the tariffs are a means to address the U.S. trade deficit with Canada, a point he has repeatedly misrepresented. In a more controversial remark, he has even implied that economic pressure could be used to turn Canada into the “51st state.”

For decades, trade between Canada, the U.S., and Mexico has been governed by free trade agreements—first NAFTA and now the Canada-U.S.-Mexico Agreement (CUSMA). While previous U.S. administrations have imposed tariffs on select industries, they have rarely reached the 25% threshold Trump is now proposing.

Meanwhile, Trump’s broader approach to economic leverage is already playing out on the world stage. On Sunday, Colombia agreed to accept deportation flights from the U.S. after Trump threatened tariffs against the country, a move that underscores his willingness to use economic force to achieve political objectives.

As March 1 approaches, Canada and Mexico are bracing for potential economic fallout. If a full-scale trade war erupts, it could drive up consumer prices, disrupt industries, and strain diplomatic relations between the U.S. and its closest allies.