TORONTO — Despite an already frayed relationship between the United States and Canada, President Donald Trump recently abruptly ended trade talks with the Great White North and imposed a 10% tariff on it. The move came after the province of Ontario aired a television ad in late October that used clips from a 1987 anti-tariff radio address by former President Ronald Reagan. A furious Trump dismissed the spot as “fraudulent” and “misleading.”
The Trump administration’s spat with Canada’s most populous province reflects an increasingly crumbling bilateral relationship. Tensions have risen for months between the mercurial Trump and Canada’s technocratic prime minister, Mark Carney, a former central bank official and financial services executive.
At stake are deep financial ties amid a long-standing, deeply integrated economic relationship between nations sharing a 5,525-mile border, the world’s longest.
“It is fair to say that over the last few months, we have been in peak tensions between Canada and the U.S. The current tariff war is more broad-based than the last,” Isabelle Salle, a University of Ottawa professor of behavioral macroeconomics, said in an interview.
“Canada is clearly the underdog and relies much more heavily on the U.S. when it comes to trade and energy than the other way around. These tariffs in Canada are akin to a composite shock, meaning they hit both supply and demand,” added Salle, who is also chairwoman of Canadian research at the university and a principal researcher at the Bank of Canada.
In Trump’s second term, U.S.-imposed tariffs have hurt jobs in the Canadian metal and auto industry, Salle said.
The overall blowback spurred one of Canada’s nationwide dailies, the National Post, to launch a “How Canada Wins” section on its website in an apparent nose-thumbing to its southern neighbor.
“There are no short-term benefits in Canada. The leadership is lacking to take this opportunity to develop trade with other countries and diversify our exports,” Salle said.
But, while the tariffs are one thing, some believe the rhetoric from the White House has added gas to the fire.
In September, when Trump (again) threatened that Canada would become the United States’s 51st state, it outraged Canadians such as freelance marketer Yehudi BenSimon, also a Toronto-based engineer.
“All of these insults, tariffs, counter-tariffs, retaliations, boycotts, and everything, just seemed so petty and punitive, that I’m not interested in traveling to the States anymore,” BenSimon said in an interview.
He’s not alone.
Canadian visitation to Florida has dropped more than 18% over the first two quarters of 2025, according to a National Post report. Visits to Washington state, where the U.S.-Canada border stretches for 427 miles, with British Columbia just to the north, have dropped. Canadian trips to Las Vegas, formerly a favorite travel destination in the U.S., have also dropped.
The Guardian reported that for quarters one through three of 2025, Canadian visits to the U.S. “continued to drop significantly,” while in July, car trips alone fell almost 37%. Forbes reported a 35% drop in September, with a 27% decline in air travel.
In 2024, Canadians spent $20.5 billion while vacationing across the U.S. However, August statistics from Tourism Economics (a branch of Oxford Economics) showed that in the first half of 2025, overall Canadian travel to the U.S. fell by 24%.
“The sentiment drag has proven to be severe,” the study showed.
Visit California, the promotional arm of the Golden State, saw the writing on the wall when it discovered that 1 in 7 Canadians canceled their visits in 2025. It asked Canucks to give California, the most populous state, with nearly 40 million people, a second chance. With its “California Loves Canada” campaign, the California tourism group offered Canadian visitors discounts to hotels and attractions, some through Expedia.
“Sure, you-know-who is trying to stir things up back in Washington, D.C.,” a statement from Gov. Gavin Newsom (D-CA) said in a jibe at Trump. “But don’t let that ruin your beach plans … Canada, come experience our California Love.”
The plan largely worked.
The Expedia partnership resulted in a spike in bookings: as of May, 1,740 California hotels reported exclusive Canadian bookings, with the campaign driving increased site traffic, engagement, and high click-through rates from Canadian users.
Canadian retaliatory measures
But not everyone got to put the cork back in the bottle. U.S. products in other sectors have taken serious hits, including alcohol, which has been legislatively boycotted in many parts of Canada.
The U.S. whiskey industry’s losses due to the boycott are in the range of well over $100 million in export value for 2025 so far. That’s compared to last year’s sales, which totaled $221 million.
In response, the absence of American products has significantly boosted demand for Canadian-made whiskey and other international alternatives, further compounding the American industry losses.
On the heels of the boycott, Maverick Distillery in Ontario even taunted U.S. bourbon.
“And hey, let’s not ignore the tariffs,” it said on its website, “the price bourbon pays to cross the border.”
It said its signature whiskey, Barnburner, “laughs in the face of those fees, giving you premium whiskey without the American import drama. Because why pay more for less when Canada’s finest is ready to steal the show?”
Similarly, the American wine industry has suffered staggering losses over the past two years due to the tariff and trade conflict, with exports to Canada dropping by more than 95% during key months in 2025 and total losses approaching $200 million annually.
In 2024, wine exports to Canada were valued at $134 million. By mid-2025, those exports had almost entirely collapsed, reaching “virtually down to zero.”
The sharpest declines began in March 2025, after Trump’s 25% tariffs on Canadian goods triggered sweeping Canadian retaliatory measures, including provincial bans on U.S. wine imports.
The repercussions have been especially acute for California’s premium wineries, which depended on Canadian consumers for high-end wines.
The trade war also eliminated hundreds of jobs tied to cross-border wine commerce and contributed to a boom in Canadian wine sales, reshaping consumer habits and retail offerings in the country.
Canadians, known for their polite character and saying “sorry” after a sneeze, weren’t taking the threats lying down.
Several notable “Made in Canada” marketing campaigns were launched by Canadian brands in the past year, supported by government initiatives that emphasized local manufacturing, national pride, and consumer awareness of Canadian-made products, such as Kraft Heinz Canada, dairy brand Lactalis, supermarket giant Sobeys, and Maple Leaf Foods.
POST-KIRK AUTHORITARIANISM REACHES ENGLAND
The federal government, moreover, launched a new “Buy Canadian Policy,” requiring Canadian content in federal procurement, especially for steel and lumber, with expanded funding for SMEs affected by foreign tariffs. This policy aims to ensure federal spending directly benefits Canadian businesses and supports domestic manufacturing.
After all the tariffs, boycotts, and bruised egos, both countries have been left to reckon with lasting economic scars and shifting allegiances. Whether any “winner” will emerge, the ripple effects of this trade war will echo through boardrooms and border towns for years to come. In the end, it may be consumers and businesses on both sides who pay the highest price.
Dave Gordon is a Toronto-based freelance journalist and has written for dozens of publications in Canada, the United States, and globally.
