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Taoiseach Micheal Martin visits President Donald Trump at the White House on March 12, 2025.
Trade war update: Canada and EU hit back at Trump
The tits and tats are getting bigger as the US’s various trade wars escalate.
Canada hits back. Ottawa on Tuesday announced a fresh 25% percent tariff on $20 billion worth of annual imports of US metals, computer monitors and servers, sports equipment, and other items. The move came just hours after Trump imposed a 25% duty on all US steel and aluminum imports.
Canada is the largest foreign steel supplier to the US, sending 99% of its exports to Uncle Sam. The White House has said its tariffs on Canada – and those set to come into effect on Mexico in April – are meant to force the two US neighbors to beef up border security.
The EU cocks the hammer too. In April, the Union will raise tariffs on nearly $30 billion in annual imports of US products, including beef, poultry, bourbon, soybeans, motorcycles, peanut butter, and jeans. That seemingly random list aims primarily at industries in GOP-controlled states.
The EU, which made the move in response to the Trump metals tariffs, said it was “open to compromise.” The $1.5 trillion US-EU trade relationship is the world’s largest.
What does Trump want from Europe? The US runs trade deficits with Europe, which Trump has called an “atrocity.” But European officials say they’ve struggled to learn more.
A White House memo in February highlighted EU restrictions on American shellfish and cars. And on Wednesday, Trump blasted Ireland’s low corporate tax rates, which have lured US firms, particularly in pharma, to register themselves in the country.
“I have great respect for Ireland,” Trump said at an Oval Office meeting Wednesday with Irish Prime Minister Micheál Martin, “but the United States shouldn’t have let it happen.”
US-Canada trade war helps Mark Carney's election prospects
With recent tensions between Zelensky and Washington, how likely are the Saudi-hosted peace talks to yield real progress?
Well, we'll find out real soon. Zelensky has certainly made his efforts to make nice on the critical minerals deal, on apologizing to the Trump White House for a meeting that frankly he has very little to apologize for, and that certainly has helped with getting this engagement going. Also, he's not attending personally, rather, his key envoys and advisors meeting with Secretary of State Rubio and National Security Adviser Waltz. I suspect that the meetings will end up being just fine, but they are unlikely to lead to a ceasefire because what the Ukrainians are prepared to accept, the Russians are not close to accepting. So either Trump is going to have to be willing to take some time, bring it to the Russians and see that the Russians are not playing full ball, or he's going to have to throw the Ukrainians under the bus more and make greater demands that they're not prepared to accept. I don't think either of those things are likely to happen today, but that's I think, the direction of travel.
Are we on the cusp of a nuclear proliferation era as Poland and Germany talk of acquiring nuclear weapons?
Germany's talking more about sharing in the nuclear umbrella with France. Poland's talking about getting its own. These things are all harder. They will take longer than these countries have. It's not like France's nuclear umbrella is deep or easily extendable. In order to have anyone believe credibly that a French deterrent would apply to other countries, a lot of things have to happen in terms of coordination and infrastructure and building up those capabilities that will take frankly years. So, I think it's important that these conversations are happening. I think that many countries around the world are moving towards establishing their own nuclear capabilities in, around, the Middle East. I can certainly see over time as Iran gets closer, the Saudis thinking about it, the Turks thinking about it, in Asia, South Korea and Japan. In Europe, a number of countries needing to have collective security because they don't feel like the Americans can provide for them. But I don't think those things are happening overnight. The global order is changing. It is really past the tipping point, but these things are slow moving processes.
Does Justin Trudeau's replacement, Mark Carney, have a shot of winning Canada's general election?
Certainly does, and three months ago would've had no shot at all. There's been an extraordinary bounce back for the Liberal Party, in part because they're now represented by someone that is not an incumbent. Think about what would've happened in the US if it hadn't been Biden or Kamala Harris, but had been an outsider after general primary, better shot of winning. That's exactly what the Canadians have now done. Trudeau forced down, Chrystia Freeland, his deputy prime minister, getting 8% in the Liberal caucus vote, and Carney getting almost 86%. So he's a centrist. He's in much better position to give a serious run against Pierre Poilievre of the Conservatives. The big question is how is Trump going to respond? Because on the one hand, it's very easy for Trump to now say, "Trudeau's gone because of me, and I'm now willing to work with somebody who is more reasonable," and the markets would certainly appreciate that. On the other hand, short of him doing that, and I think it's unlikely that he's going to reach out and extend a hand to the Canadians, then Trump beating on Canada more gives Carney a better shot of winning because he's the guy that can manage an economic crisis and also because the Canadians are so united in their anger with the United States, kind of like Mexico is right now, kind of like a number of European countries are right now. So Trump is definitely a uniter, just not inside the US, more inside other countries.
Former Bank of Canada and Bank of England Governor Mark Carney listens to outgoing Prime Minister Justin Trudeau's speech just before being elected to succeed Trudeau as Liberal Party leader on Sunday, March 9, in Ottawa, Canada.
Carney clinches Canadian Liberal leadership
Mark Carney, former governor of the Bank of Canada and the Bank of England, won the leadership of Canada’s Liberal Party on Sunday, succeeding outgoing Prime Minister Justin Trudeau. Carney, 59, decisively defeated former deputy Prime Minister Chrystia Freeland, former Minister of Democratic Institutions Karina Gould, and former MP and businessman Frank Baylis, garnering a whopping 85.9% of the vote. The campaign was dominated by US President Donald Trump’s threats of tariffs and territorial annexation.
In his victory speech in Ottawa, Carney said “Donald Trump has put unjustified tariffs on what we build, what we sell, how we make a living. He is attacking Canadian families, workers, and businesses, and we cannot let him succeed. And we won’t.” He added, “My government will keep our tariffs on until the Americans show us respect.”
Carney is expected to be sworn in as prime minister by March 19. His immediate priorities include forming a cabinet and winning a seat in Parliament, but his minority government also faces a non-confidence vote when Parliament is scheduled to reconvene on March 24. For this reason, Carney is expected to call an election before that date. He will face off against Conservative leader Pierre Poilievre in what is an increasingly tight race.
What issues will be on the table? Trump, Trump, and more Trump. Thirty-six percent of voters say Trump is the most important issue for them, with jobs and the economy second at 29%. The most recent poll found the Liberals closing in on the Conservatives, 34.3 to 36.5%. Two months ago, the Conservatives had a 25% lead, which evaporated following Trudeau’s resignation and Trump taking power in Washington.
What has Carney proposed? Carney would implement retaliatory tariffs targeting key US industries and diversify Canada’s trade partnerships. He also pledged to boost stagnant wages and lower high housing costs, and in his speech he said he would eliminate the carbon tax on families, farmers, and small and medium-sized businesses and scrap a controversial capital gains increase.
President Donald Trump talks with Canada's Prime Minister Justin Trudeau during a North Atlantic Treaty Organization Plenary Session at the NATO summit in Watford, Britain, in December 2019.
Mexico, Canada get tariff reprieve
On Thursday, US President Donald Trump announced a one-month tariff reprieve on all Mexican and Canadian goods governed by the USMCA, as well as potash,until reciprocal tariffs are imposed worldwide on April 2.Canada supplies 80% of US potash, a critical component of fertilizer. The decrees follow Wednesday’s one-month tariff reprieve for America’s Big 3 automakers: Stellantis, Ford, and General Motors.
What will be tariff-free? According to senior administration officials, 50% of goods entering the US from Mexico and 38% of goods from Canada would qualify. Some Canadian energy products will still be subject to a 10% tariff, and some Mexican products, like computers, will still face a 25% tariff.
How have Canada and Mexico responded? Mexican President Claudia Sheinbaum had not imposed tariffs but was set to announce them Sunday if no deal was reached.
Canada’s initial set of tariffs on $30 billion in American goods imposed on Tuesday will remain. A second wave of $150 billion set to take effect after 20 days has reportedly been suspended until April. Ontario Premier Doug Ford also said that Canada would be imposing a 25% tariff on electricity exports starting Monday, regardless of whether tariffs would be lifted. Canadian provinces have also removed US-made alcohol from store shelves and barred American firms from procurement contracts, and there is no sign that this measure will be reversed.
Why did Trump change course? Trump said “I wasn’t even looking at the market” but major stock indexes plummeted this week, as investors were spooked by the uncertainty. In the Oval Office, Trump said “This is about companies and countries that have been ripping off our country and they won’t be ripping off our country anymore.”
Trump’s reprieve on Mexico specifically mentioned actions taken to stem the flow of illegal aliens and fentanyl into the US. This contrasts with his conversation Wednesday with Canadian Prime Minister Justin Trudeau in which Trump claimed Canada’s efforts on fentanylwere insufficient to drop US tariffs.
But the US president has citedother reasons for tariffs on Canada, including accusing the country of not allowing US banks to operate there and falsely claiming that the US “subsidizes” Canada to the tune of $200 billion a year. Commerce Secretary Howard Lutnick alsoaccused Canada of having a “national tariff” on US products because it has a 5-15% federal-provincial sales tax.Trump grants some tariff relief – but it’s temporary
US President Donald Trump gave America’s Big Three automakers a one-month tariff reprieve but expects them to use the time to shift production from Canada and Mexico to the United States. White House Press Secretary Karoline Leavitt announced the temporary exemption Wednesday after Trump held a call with the CEOs of Stellantis, Ford, and GM, at their request. Levitt also made it clear that, as of April 2, reciprocal tariffs will go into effect worldwide.
What are they? In a nutshell, Trump will slap tariffs on other countries that match the tariffs those countries place on the US.
Which countries would be most affected? India, Argentina, South Korea, and Brazil had the highest tariff regimes as of 2023. India recently cut levies on many US imports, including motorcycles, but still has tariffs on imported cars of up to 110%, leaving small exporters demanding further reductions from Delhi. Argentinian President Javier Milei recently praised Trump’s plan for reciprocal tariffs and said he wants to pursue a reciprocal trade pact, even if it means leaving the Mercosur trade pact with neighboring South American countries.
Will Trump reverse course? It’s possible but unlikely. Trump has long been a believer in tariffs. In his address to Congress on Tuesday evening, he said “Tariffs are not just about protecting American jobs. They’re about protecting the soul of our country.”Staff remove bottles of US alcohol from the shelves of a Liquor Control Board of Ontario store as part of retaliatory moves against tariffs announced by President Donald Trump, in Toronto, Canada, on March 4, 2025.
Canada, Mexico, and China retaliate against Trump’s tariffs
It’s official: The United States is now waging a full-blown trade war against three of its largest trading partners. On Tuesday, Washington imposed tariffs of 10% on energy and 25% on all goods imported from Canada and Mexico and doubled its existing tariffs on Chinese imports from 10 to 20%. All three countries responded with harsh words and retaliatory measures.
Canada imposed an immediate 25% retaliatory tariff on $30 billion worth of US goods, with an additional $125 billion worth of products to be tariffed in 21 days. Provincial liquor stores removed American alcohol and Ontario Premier Doug Ford ripped up a $100 million contract with Elon Musk’s Starlink. Ford alsothreatened a 25% retaliatory tariff on electricity exports. Canadian Prime Minister Justin Trudeau called the tariffs “dumb,” prompting US President Donald Trump to repeat his taunt of “Governor Trudeau” and promiseeven higher tariffs in response to retaliatory efforts.
Mexico’s President Claudia Sheinbaum took a slower approach. “We have said it in different ways: cooperation and coordination, yes; subordination and interventionism, no,” she said. Sheinbaum plans to speak with Trump by phone on Thursday and will announce retaliatory measures on Sunday if no deal is reached.
China, meanwhile, placed an additional 10% to 15% tariffs on imported US goods, including chicken, wheat, soybeans, and beef as of March 10. Beijing says it will “fight to the bitter end of any trade war” but left the door open for talks, advising the US to “return to the right track of dialogue and cooperation before it is too late.”
The tariff war had immediate economic effects.Markets plunged, the price of a Dodge Ram truck reportedly rose from $80,000 to $100,000, and by mid-March American gas prices could rise by as much as40 cents per gallon, while Ford said the auto manufacturing sector in Canada could shut down.
Could Trump change course? We’ll be watching for further market volatility as well as blowback from consumers, businesses, and politicians. But stay tuned for a possible course correction: US Commerce Secretary Howard Lutnick already hinted Tuesday that Trump is considering “relief for USMCA-compliant goods” and “may roll back Canada and Mexico tariffs tomorrow.”
What does Trump’s critical minerals play in Ukraine have to do with Canada?
After softening its demands, the US has secured a critical minerals development deal with Ukraine, whose president, Volodymyr Zelensky, is planning to visit Washington on Friday. The US had initially demanded $500 billion in critical minerals for jointly developing critical these resources, and, ostensibly, repaying the country for money sent to Ukraine to aid it in its defense against Russia. Ukraine hopes the deal will ensure future military funding assistance from the US, which has been thrown into doubt since Donald Trump came to office. (Read our explainer on rare earths here.)
Closer to home, as Trump threatens Canada with tariffs, there’s growing concern that the president’s ultimate aim – aside from possibly annexing the country – is gaining control of Canadian critical minerals and rare earths. These resources, which include lithium, cobalt, copper, graphite, and more, are essential to several industries and products, including electric vehicles, cell phones, computers, and military hardware, making them not just essential to the economy, but to national defense, too.
In Canada, concern over critical minerals played a notable part in the Liberal Party’s English-language leadership debate on Tuesday night, as candidates to replace outgoing Prime Minister Justin Trudeau spent much of the evening talking about threats from the US. Presumptive frontrunner Mark Carney said Canada ought to leverage its critical minerals to deal with Trump and strengthen the Canadian economy, while Parliament member and Cabinet minister Karina Gould warned that Trump’s focus on Canada was expressly tied to a play for those resources. The growing focus on economic and domestic security in the US means we could be hearing a lot more about critical minerals and rare earths in the weeks and months to come as the president refines his demands from Canada.President Donald Trump meets with Canada’s Prime Minister Justin Trudeau in a bilateral meeting at the G7 Summit in Charlevoix, Quebec, back in June 2018.
Will the Five Eyes become Four Eyes?
This week, Canada and the global intelligence community were shocked and concerned at the suggestion that the White House was considering removing Canada from the Five Eyes intelligence alliance. On Tuesday, The Financial Times reported that Donald Trump’s trade and manufacturingadviser Peter Navarro, a trusted consigliere to the president, was lobbying the administration to kick Canada out of the intelligence-sharing group, which also includes the United Kingdom, Australia, and New Zealand.
Navarro was quick to deny the reports, calling it “crazy stuff,” and adding “We would never, ever jeopardize our national security ever with allies like Canada. Ever.” But the FT, which stands behind its reporting, has sources in the administration who say Navarro’s threats to cut Canada out of the Five Eyes alliance is a tactic for pushing the country to fall in line on Trump’s demands on trade, border security, and defense spending.
CTV News reporter Stefanie Ha spoke with former Justin Trudeau national security and intelligence advisor Vincent Rigby, who said the Five Eyes threat could indeed be a “pressure point” the Trump administration is exploiting, similar to a tactic the president used during his first term by threatening to withhold intelligence from Canada.