Trump Tariffs: How a 25% Tariff Threat Could Impact Canada’s Economy & Shape the Next Election
🎧 Podcast Episode 180 with Vassy Kapelos
The looming threat of 25% tariffs on Canadian imports by U.S. President-elect Donald Trump has sparked deep concern across Canada.
In my recent interview with Vassy Kapelos, Chief Political Correspondent for CTV News, we explored the potential economic consequences of these tariffs and the political implications as Canada prepares for a likely federal election.
The Economic Fallout of a 25% Tariff
Vassy didn’t mince words when discussing the impact these tariffs would have:
“You can’t overstate the potential impact of what a 25% tariff would do to our economy. Every premier I’ve spoken to—from Ford to Smith—says if those tariffs are applied, their provincial economies would almost immediately enter a recession.”
These tariffs, promised by Trump as part of his aggressive trade agenda, could hit Canadian industries hard, from automotive and manufacturing to agriculture and energy. The concern isn’t hypothetical—premiers across the country have already started raising alarms about their ability to manage the fallout.
For provinces like Ontario and Alberta, which are heavily reliant on trade with the U.S., these tariffs could deliver a devastating blow, forcing job losses and economic slowdowns. The recessionary consequences would ripple across Canada, impacting businesses, families, and the cost of living.
Vassy emphasized that this issue will be front and center for voters:
“I don’t know how it doesn’t become a massive election issue. Canadians are going to be asking: Who can navigate this? Who can handle this? And who’s going to get the best outcome for Canadians?”
A Test of Leadership for Justin Trudeau
The Trump tariffs represent a major test for Prime Minister Justin Trudeau, whose government successfully renegotiated NAFTA during Trump’s first term. Trudeau’s track record in those earlier negotiations—where Canada avoided a complete trade collapse—will likely become a key point in his re-election pitch.
During our interview, I noted that Trudeau could argue, “We’ve done this before. Hopefully we can do it again in a good way and deliver for Canadians.”
However, Vassy pointed out that the current situation is far more urgent. Unlike the lengthy NAFTA negotiations, Trump has promised to impose these tariffs immediately upon taking office:
“He says he’s going to do it on January 20th, through an executive order. We don’t have years to escape the dramatic impact. We have a month and a half.”
This condensed timeline raises questions about whether Trudeau’s leadership can withstand the pressure. With declining public approval and mounting calls for his resignation, Trudeau’s ability to respond effectively to Trump’s policies could make or break his government.
Conservative Opportunities and Poilievre’s Approach
For Pierre Poilievre and the Conservative Party, Trump’s tariffs provide both an opportunity and a challenge. Vassy explained that while Trudeau can point to his experience in navigating similar challenges, Poilievre lacks that track record.
Instead, Poilievre has focused on themes of economic strength and self-sufficiency, arguing that Canada needs to reduce its reliance on foreign trade and “make Canada strong again.” However, as I pointed out, the challenge for the opposition is pitching solutions that resonate with Canadians while lacking the direct experience of handling a trade crisis of this scale.
The question voters will need to consider is: Do they trust the current government to navigate this threat, or will they turn to the Conservatives for a new approach?
A Defining Issue in the Next Election
Vassy believes the Trump tariffs will be a defining issue in Canada’s next federal election, which feels increasingly imminent. The economic and political weight of this threat will force all parties to present clear strategies for managing Canada’s relationship with the United States.
As she explained:
“This is a huge weight that faces any politician at any level in this country. Whether now or coming into power, this will inform how Canadians vote.”
Canadians will look for leadership that can not only protect jobs and industries but also stabilize the economy during a turbulent period. The stakes couldn’t be higher.
Canada Braces for Uncertainty
The Trump tariffs represent more than just an economic threat—they symbolize a turning point for Canada’s political future. As Vassy Kapelos highlighted in our conversation, the ability to navigate these challenges will define the next federal election and determine Canada’s economic trajectory for years to come.
Whether it’s Trudeau’s experience, Poilievre’s promises, or a third-party alternative, Canadians will face a clear choice: Who do we trust to protect Canada’s economy and stand up to Trump’s policies?