Today, January 20, 2025 marks the inauguration of Donald Trump as the 47th President of the United States. For the past two months, Trump has been threatening to impose a 25% tariff on products from Canada and Mexico on his first day in office in order to restrict the flow of firearms, drugs and migrants across the Canada-US border. This announcement has caused significant political strife amongst leaders both at the national and provincial level across Canada.
For more than four decades, Canada and the United States have strengthened their trade relationship through a series of free trade agreements, with the most recent, the Canada-United States-Mexico Agreement (CUSMA) that took effect in July 2020. This pact reinforces the strong economic bond between the two nations, supporting fair trade practices and resilient supply chains across a variety of key industries.
More specifically, Ontario’s economy is closely tied to the United States through trade. With approximately $500 billion worth of goods crossing the border each day in two-way trade with the US, the possibility of new U.S. tariffs has sparked real concern with Premier Doug Ford. These proposed tariffs target major Canadian exports, but it could put thousands of Ontario jobs at risk and shake up the province’s industrial base if implemented.
Premier Doug Ford has warned that such tariffs could significantly hurt employment and slow economic growth. The auto sector, one of Ontario’s most important industries, could be hit especially hard, along with steel and aluminum producers. The Fraser Institute, has gone so far as to say these tariffs could “cripple key industries” and trigger “widespread economic fallout.”
During the Trump administration, previous tariffs strained relations between Canada and the U.S. and caused economic disruption. Ontario responded with retaliatory measures to safeguard its industries, and Ford has hinted he may do the same again if the new tariffs come through. His message is clear: Ontario is ready to defend its economy to minimize job losses and avoid an economic downturn.
Earlier today, Premier Ford announced that he would remove all American alcohol products from the LCBO shelves as a retaliatory measure against imposed tariffs.
The repercussions could go well beyond immediate financial losses. These tariffs could undermine the longstanding partnership between Canada and the U.S. that has driven shared prosperity for decades. On both sides of the border, businesses might have to shoulder higher costs, which could worsen inflation and reduce consumers’ purchasing power.
There’s no doubt that these proposed tariffs pose a serious challenge for Ontario. By working together, policymakers, industry leaders, and public affairs professionals can navigate this crisis and protect the province’s long-term prosperity.