President Trump made good on his threats to impose a 25% tariff on goods coming from Canada into the US on March 4, 2025. In defense, Prime Minister Justin Trudeau instituted counter-tariffs on US goods coming into Canada later that day to the amount of $20.7 billion of US imports. No one wins in this battle between two neighbouring countries, but Canada has never been more steadfast in defending our goods, and resources and our place on the world stage.
The reality is that this trade war will hit our wallets first. Prices will go up on a lot of consumer goods like groceries, appliances and vehicles. The other reality is that Canadians will see a reduction in the variety and the amount of good as the importing of products from the U.S. will slow down.
With groceries already at an all time high, costs on meat, dairy products, fruits and vegetables will rise. We can do our part by shopping local, finding local butchers and buying from local farmers. Their costs will rise also, but we will be supporting Ontario producers and keeping the local economy strong.
The local economy in Southwestern Ontario could see the hardest hit in the automotive sector, trucking industry and the steel industry. Southwestern Ontario has automotive plants like CAMI and Toyota, and many automotive related manufacturing businesses like tool and die shops. The Mayor of Stratford commented earlier this week that “Eighty-five per cent of our manufacturing is auto-related. And so even though it’s a smaller economy, it’s still a big part of that economic base.” Ultimately, this will result in job lay-offs and possibly even closures of some businesses.
Inflation could also rise, which could be reflected in a rise in interest rates affecting mortgages and buying power.
We have seen two days of volatile trading on the both the Dow Jones, NASDAQ and the TSX. The TSX hit a seven-week low this week posting the biggest decline since December 18, 2024.
Ontario is facing the largest industrial crisis they have ever seen. The entire future of the Ontario economy is uncertain. Our provincial government is working hard to remove interprovincial trade barriers to add millions to our economy. Our federal government is standing strong against the threats from the US. We can do our part by supporting our local businesses and keeping our money in Ontario and Canada.