With Mark Carney’s victory as the leader of the Liberal Party to become the new Prime Minister of Canada, the tariff war between the United States and its northern neighbor, which is its largest trading partner, has escalated. This escalation is a result of the sharp dispute between the leaders of the two countries, which ended with the imposition of reciprocal trade tariffs on both countries. The new tariffs included the United States increasing the tariffs it imposed on all steel and aluminum imports from Canada last month from 25% to 50%, and this decision will come into effect today, Wednesday. In response, Canada imposed a 25% customs duty on the electricity consumed by approximately 1.5 million residents of Michigan, Minnesota, and New York, although these tariffs were later suspended after being announced.
Reasons for the dispute
The dispute between the United States and Canada since the return of U.S. President Donald Trump to office at the White House on January 20, 2025, can be attributed to several reasons that have led to tensions between the two countries, which can be explained as follows:
1- Trump launches a trade war against Canada: Since assuming office at the White House, U.S. President Donald Trump has deliberately launched a trade war against Canada by imposing a 25% customs duty on its aluminum and steel imports. His justification was that Canada had caused the drug and illegal immigrant crisis in the United States. Not content with that, he decided last Tuesday to double the customs duties imposed on steel and aluminum imports from Canada from 25% to 50%, effective from yesterday, Wednesday. This angered Canada, prompting it to threaten the United States with imposing similar customs duties on it, which led Trump to back down from raising the tariffs, threatening Canada with paying a heavy price for its threat to cut off electricity to the American states.
2- Canada threatens to cut off electricity to Washington: The Premier of Ontario, Canada, Doug Ford, threatened to impose a 25% customs duty on electricity prices exported to Minnesota, Michigan, and New York, in addition to threatening the United States with cutting off its electricity supply. This was a response to the recent trade decisions announced by U.S. President Donald Trump. It is worth mentioning that the Premier of Ontario stated that he would not hesitate to increase these tariffs if the United States escalates its customs duties on it. He also expressed his regret to the American people, whom he described as not having started this trade war, but who would bear the consequences of their president Donald Trump’s actions. These statements and decisions angered Trump, leading him to threaten on his social media platform Truth Social to declare a national emergency in the three states affected by the electricity cut-off.
3- Canada’s role in the drug and illegal immigration crisis in Washington: The reason behind U.S. President Donald Trump’s trade war against Canada may be his belief that Canada has caused the influx of drugs, particularly the devastating and widespread drug fentanyl, into the United States through the northern border with Canada. Additionally, Canada has been blamed for the entry of thousands of illegal immigrants into the United States, an issue that the country still faces. Therefore, Trump imposed customs duties on Canada to stop it from smuggling drugs into the United States and to address the influx of illegal immigrants as well. He believes that these policies will ensure the security of Washington and its citizens.
4- Canada imposes customs duties on American dairy products: Another reason for the dispute between the two countries is Canada’s imposition of customs duties on American dairy products. These tariffs angered U.S. President Donald Trump, prompting him to call on Canada to drop the customs duties it imposed on American dairy products, which he described as “anti-American farmer tariffs.” He also threatened to impose large customs duties on imported cars if Canada did not drop these tariffs.
5- Canada’s persistence in keeping customs duties on Washington: Canada wanted to escalate the trade war with Washington by committing the new Canadian Prime Minister, Mark Carney, to keeping the retaliatory Canadian customs duties in effect until the Americans show respect and provide reliable commitments. This is because he considered the customs duties imposed by the U.S. President an attack on Canadian workers and families.
5- Trump’s statements regarding annexing Canada to the United States: The main reason behind U.S. President Donald Trump’s continuous imposition of customs duties on Canada may be his desire to annex the second-largest country in the world to the United States to fulfill his dream of expanding American territory. Since assuming office at the White House, Trump has repeatedly stated that he would work towards annexing Canada to the United States, making it the 51st American state. Some attribute Trump’s persistence in annexing Canada to the United States to various reasons, including settling personal scores after the failure of his hotel projects there, or as a result of his strained relationship with Canadian Prime Minister Justin Trudeau, or because Canada possesses many mineral resources that Trump wants to exploit to make the United States dominate the global stage.
Therefore, following the resignation of Canadian Prime Minister Justin Trudeau, Trump stated that he “loves many people in Canada who want to become the 51st American state,” which angered the new Canadian Prime Minister, Mark Carney, and led him to declare that his country would never become part of the United States and that it would win the trade war with Washington.
Possible scenarios
There are three possible scenarios that are expected to occur following the victory of Canadian Prime Minister Mark Carney, who rejects the policies of U.S. President Donald Trump. These scenarios can be explained as follows:
1- Escalation of the trade war between the United States and Canada: In this scenario, it is expected that the trade war between the two countries will escalate due to U.S. President Donald Trump’s insistence on annexing Canada to the United States and significantly increasing customs duties on Canada, particularly the tariffs on Canadian car imports on April 2nd, which he believes will lead to the permanent closure of the Canadian car industry. Meanwhile, Canada, through its new Prime Minister Mark Carney, rejects calls for its annexation to the United States, in addition to the threat by Ontario Premier Doug Ford to increase customs duties on electricity if the United States continues to impose additional customs duties.
2- Annexation of Canada to the United States: This is an unlikely scenario due to the popular Canadian opposition to it and the strong Canadian resistance. According to this assumption, it is possible that the Canadian authorities will be forced to agree to U.S. President Donald Trump’s calls in order to get rid of the continuous customs duties that the United States will impose on it to weaken its economic strength. This is based on the U.S. President’s statements in which he stated that annexing Canada to the United States would make all customs tariffs between the two countries disappear completely.
3- Strengthening economic cooperation between the two countries: In this scenario, it is likely that U.S. President Donald Trump and the new Canadian Prime Minister Mark Carney will reach a compromise that allows the United States to benefit from the mineral and natural resources that Canada possesses in exchange for the U.S. President stopping the trade war he launched against it since assuming office.
Annexation of Canada
In conclusion, it can be said that U.S. President Donald Trump will continue to impose customs duties on Canadian products in order to weaken its economic strength and force it to make a deal with him regarding sharing mineral wealth or providing tangible benefits to the United States, or in the most extreme scenario, agreeing to join the United States. This is because Trump is known for his insistence on his positions, especially if it will bring him benefits, as Canada is considered one of the richest mineral reserves in the world, and its annexation would make Washington a major player in the natural resources market, achieving multiple benefits for the United States and expanding its geographical reach in North America.
