OTTAWA, March 12 The air in Ottawa is thick with tension, and the scene at the Department of Finance building is one of quiet determination. Canadian Prime Minister Mark Carney, a man who once steered the Bank of Canada and the Bank of England, now stands at the helm of a nation caught in the throes of a trade war with the United States. On March 12, 2025, Carney announced retaliatory tariffs on U.S. goods in response to tariffs imposed by President Donald Trump on Canadian steel and aluminum.
The move came after the U.S. tariffs, which took effect on the same day, applied a 25% duty on all steel and aluminum imports, including from Canada. By nightfall, the Canadian response was clear.
Carney’s government targeted C$29.8 billion (approximately US$20.7 billion) worth of U.S. goods with its own tariffs, including steel, aluminum, computers, and other products. The Canadian tariffs were set to take effect the very next day, March 13, 2025, a swift and calculated move in a dispute that has roots stretching back to 2018. That year, the U.S. imposed tariffs on Canadian steel and aluminum under Section 232 of the Trade Expansion Act of 1962, citing national security concerns.
Those tariffs were later lifted in 2019 under the USMCA agreement, but were reimposed in 2025. The stakes are high.
Canada is the largest export market for the U.S., with bilateral trade in goods and services exceeding US$900 billion in 2024. The dispute has raised concerns about the impact on North American supply chains, particularly in the automotive and manufacturing sectors. The Canadian government has announced that it will provide support to affected workers and industries, including through the existing Business Development Bank of Canada and Export Development Canada.
Carney, who was sworn in as Prime Minister on March 14, 2025, after winning the Liberal Party leadership race on March 9, 2025, has made it clear that Canada will not back down. He has stated that the country will work to diversify its trade partners and reduce its reliance on the U.S. The tariffs are expected to have significant economic consequences for both countries, with analysts projecting a potential reduction in GDP growth for Canada of up to 1.5% and for the U.S. of up to 0.5% in 2025.
The situation remains fluid. Carney has indicated a willingness to engage in talks with the U.S. administration, but has stressed that any agreement must respect Canadian sovereignty and economic interests.
As the dust settles on a trade war that has already begun to reshape the economic landscape of North America, one thing is certain: the coming months will be watched closely by both nations and the world.
