From Top Electric.

In 2025, President Trump’s aggressive trade war with Canada and Mexico is reshaping North American economics. The U.S.-Canada trade relationship, once a cornerstone with 75% of Canadian exports flowing south, faces unprecedented strain. Trump’s tariffs—25% on Canadian steel and aluminum, escalating to 50%, 25% on cars and parts, and 10% on energy exports—are forcing a dramatic economic divorce. Canadian Prime Minister Mark Carney declared the old U.S. partnership “over,” signaling a bold pivot. Canadian businesses are diversifying, with firms like a British Columbia pharmaceutical company and a Montreal steel supplier forging new Asian and European ties. Canada’s 2024 trade deal with Indonesia, eliminating 90% of tariffs, and a $2.3 billion Indo-Pacific strategy targeting 40 countries underscore this shift. Foreign direct investment in Canada surged 9% in 2023, while U.S. FDI fell 28%. Meanwhile, U.S. consumers face higher prices for groceries, fuel, and cars, with Michigan’s auto industry warning of job losses. Canada’s GDP grew 2.6% in late 2024, despite tariff shocks, while U.S. exports to Canada dropped. As Ottawa builds global alliances with the EU, Japan, and India, it positions itself as a stable, rules-based economy. Trump’s protectionism risks isolating the U.S., while Canada’s predictability attracts multinational investment. This trade war isn’t just about tariffs—it’s about trust, and Canada is winning it.

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