Donald Trump’s renewed tariff push is reshaping Canada–US trade, and Canada is feeling both the pressure and the opportunity as supply chains tilt toward the Western Hemisphere. According to Politico’s recent interview with US Trade Representative Jamieson Greer, the Trump administration’s strategy now places the lowest tariff rates in the Western Hemisphere to encourage companies to “nearshore” production into countries like Canada and Mexico, while keeping much higher tariffs on China and parts of Asia. [4] For Canadian exporters plugged into North American supply chains, that positioning is an advantage, but it comes against the backdrop of stalled high‑level talks and a tougher tariff environment on key Canadian sectors. [3][4]

Fox Business reports that President Trump abruptly halted formal trade talks with Canada in October after an anti‑tariff ad campaign out of Ontario, leaving the USMCA framework in place but political engagement at a low simmer. [3] Under USMCA, about 85% of Canadian exports to the US still enter tariff‑free, which continues to anchor Canada’s access to its largest market, but Canadian business leaders warn that relying on the agreement alone, without active diplomacy, risks leaving punitive sector‑specific tariffs in place longer. [3] With roughly a quarter of Canada’s GDP tied to trade and three‑quarters of that with the US, every percentage point on tariff lines for autos, metals, and energy matters directly to Canadian jobs and investment decisions. [3]

The sharpest pain points today are in heavy industry and autos. Fox Business notes that Canada now faces global US tariffs of around 50% on steel, aluminum, and copper products, 25% tariffs on Canadian‑made passenger vehicles based on non‑US content, and roughly 10% tariffs on non‑USMCA‑compliant energy exports such as crude oil and natural gas. [3] Canada rolled back most of its counter‑tariffs earlier this fall, keeping retaliatory measures mainly on steel, aluminum, and non‑USMCA‑compliant autos, signaling a strategy of de‑escalation while hoping Washington blinks first. [3] For listeners in the manufacturing heartland, that means continued uncertainty on input costs, investment timing, and whether to retool plants for higher North American content to dodge the harshest rates.

From Washington’s side, the message is that tariffs are here to stay as a core policy tool, not a temporary shock. Politico’s piece on Greer underscores a tiered tariff world: the highest rates on China due to the trade deficit and “unfair practices,” the next tier on Southeast Asia and India, then around 15% on allies like Europe, Japan, and Korea, with the Western Hemisphere treated as the relatively low‑tariff safe zone. [4] For Canada, that reinforces two realities: first, relative to Asia and Europe, it remains one of the safer havens for exporters into the US market; second, within that haven, specific Canadian sectors can still be singled out for aggressive “reciprocal” tariffs if political or sectoral disputes flare. [4][5]

Looking ahead, analysts at firms such as PIMCO argue that the 2025 tariff and tax mix has raised costs unevenly across industries while nudging companies toward automation and reshoring. [2] That dynamic is already visible in cross‑border investment flows, as firms weigh whether to expand in Canada or the US to minimize exposure to future tariff shocks while still serving North America as a single production base. [2][7] For Canadian policymakers, the challenge will be to leverage Canada’s Western Hemisphere advantage, deepen continental supply chains, and still push back where targeted US tariffs threaten key sectors like autos, energy, and metals.

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