The US-Canada trade war in 5 charts

The ongoing trade dispute between the United States and Canada continues without resolution. Since President Donald Trump assumed office in 2025, tensions have escalated with the implementation of wide-ranging tariffs. Canada was among the first countries targeted by the Trump administration, followed by its own reciprocal measures.

Currently, the US has imposed tariffs on key Canadian sectors, including steel, aluminium, lumber, and automobiles, accompanied by additional levies. In response, Canada has retaliated with its own counter-tariffs, aiming to match the US tariffs dollar-for-dollar and strategically. No end to the trade war is in sight. The impact of these tariffs varies across states and provinces in Canada and the US.

Ontario, the most populous province with a significant manufacturing sector, has suffered the most, particularly its auto and steel industries. Ontario has lost tens of thousands of manufacturing jobs since early 2025 due to the auto and steel tariffs. Quebec's metal exports fell by 36% in 2026 and experienced a 3.6% employment drop in the sector.

The global average effective US tariff rate on Canada has nearly doubled from 2.9% in June to 5.7% in 2026, surpassing the rates faced by other countries like Mexico and the UK. Canadian businesses are adapting to diversify trade, with some shifting focus to European markets due to the ongoing trade war with the US. While foreign direct investment into Canada reached C$96.8 billion in 2025, the highest inflow since 2007, some regions in Ontario remain heavily tied to the US market, posing challenges for export diversification.