Trump’s New Tariffs Threaten $28 Billion of Canadian Exports

President Donald Trump’s latest move in the escalating trade spat has a very specific target: about five per cent of the goods Canada ships to the United States each year. That slice of trade translates to roughly $28 billion in value, according to the latest estimates from Canadian economists.

On Tuesday, the White House rolled out a set of new duties that will sit on a handful of familiar categories – dairy products, eggs, orange juice, and even certain tobacco items. While the list isn’t exhaustive, the items flagged are ones that sit comfortably in the daily lives of many Canadians and, for many, on the shelves of U.S. supermarkets.

For context, Canada sends about $500 billion worth of goods across the border annually. A five‑percent hit may sound modest, but the real pain comes from the fact that many of the affected products are already high‑margin, low‑volume items. A 12.5 % tariff on dairy, for example, could add a noticeable bump to the price of a litre of milk or a block of cheddar that crosses into the United States.

Economists in Ottawa are quick to point out that the impact won’t be limited to American shoppers. Canadian producers who rely on U.S. demand could see orders shrink, forcing them to look for alternative markets – a process that isn’t instantaneous and often comes with extra shipping costs. The dairy sector, already grappling with a complex supply‑management system, could feel the squeeze hardest.

"We’re looking at a modest hit on overall trade numbers, but a potentially outsized effect on specific industries," said a senior analyst at the Conference Board of Canada. "If U.S. consumers see higher prices, they may turn to domestic alternatives, and that could hurt Canadian producers in ways that aren’t captured by a simple percentage figure."

The Canadian government has not yet laid out a formal response, but sources say Ottawa is weighing a range of options – from seeking a quick diplomatic fix to preparing a retaliatory package of its own. Earlier this year, Canada slapped modest tariffs on a selection of U.S. steel and aluminium, a move that was widely seen as a proportional response to previous American measures.

Provincial premiers are also weighing in. In Alberta, where agriculture and energy dominate the economy, officials warned that the new duties could "compound an already fragile situation" for farmers already coping with volatile commodity prices.

Retailers on both sides of the border are already bracing for the inevitable price adjustments. A supermarket chain in Ontario told a local news outlet it expects to see a modest uptick in the price of imported orange juice within the next quarter.

For everyday Canadians, the headline might read "higher prices on some grocery items," while for policymakers the story is about leverage, negotiation tactics, and the broader question of how far this trade war will go before both sides feel the pinch.

As the situation evolves, experts agree one thing: the next few weeks will be crucial in determining whether diplomacy can defuse the tension or whether a deeper, more protracted tariff battle looms on the horizon.