Trump tariffs and Canada: U.S.-China trade war escalates

Premier Doug Ford tells CNN’s Wolf Blitzer that we’ll drop our tariffs tomorrow if President Trump drops drops the tariffs.” Ford notes Canadian travel to the U.S. has plunged dramatically due to Trump’s moves. “And is that not unfortunate? Two countries, two groups of people that love each other. We need to get through this and start traveling back and forth.”

Liberal leader Mark Carney said he spoke Thursday with European Commission Ursula von der Leyen about the EU’s delay on implementing their tariffs, and understands their position because the U.S. paused reciprocal tariffs for 90 days, but said with direct tariffs in effect against Canada, the U.S. “understands” Canada’s position. He said “the adjustment” for CUSMA-compliant Canadian exports is “not complete.”

Carney stressed the “key point” is that Canada and the U.S have agreed to start negotiations on a new trade deal after the election.

Carney said he spoke to Von der Leyen because he is interested in “deepening our trading relationship with the European Union, with the United Kingdom, with like minded partners in Asia.”

The Conservative leader Pierre Poilievre had earlier Thursday stressed the question for voters is whether they want four more years of Liberals in government or whether they want “change.” Carney, however, stressed what the Liberals say is the ballot question. “One of the big questions in this election is, who’s going to protect Canadians, but also who’s going to represent Canada at those negotiations? Who’s going to get the best deals for Canada?”

Liberal leader Mark Carney, on the election hustings, turned aside warnings by Trump and his commerce secretary Howard Lutnick that retaliatory tariffs against American should be dropped.

Carney said although Trump’s pause on tariffs for most other countries is “a welcome reprieve for the global economy, the impacts of other tariffs and the threat of future tariffs are already being felt around the world and here at home. So the stakes have never been higher for our economy.”

He said Canada would not halt its retaliatory counter-measures against Trump’s tariffs on this country that remain in place. The U.S. tariffs include 25 per cent border tariffs on non-CUSMA compliant goods, on aluminum and steel tariffs, and on autos.

“Those tariffs are threatening our families, our workers and our businesses, and while they have been imposed under different pretenses, they all are unjustified, unwarranted and misguided,” said Carney, “and we are responding with purpose and force.”

Carney said the U.S. tariffs “are not the only American policies that are threatening our economy and our society,” saying that cross-border traffic in firearms and hate online are a threat to “the safety of our communities.”

“Criminals are taking advantage of irresponsible American gun laws and their weak border enforcement to bring illegal guns into Canada. Large American online platforms have become seas of racism, misogyny, anti-semitism, Islamophobia and hate in all its forms, and they’re being used by criminals to harm our children.”

Carney unveiled a suite of measures he said would combat those threats — some of which are new, some of which reiterate past Liberal commitments. And he said after his campaign event, he planned to return to Ottawa to meet with cabinet committee on Canada-U.S. relations and national security to plan next steps.

OTTAWA—New travel numbers suggest Canadians made fewer return trips from the United States last month compared to the same time last year, with a sharp decline in trips by car.

Statistics Canada says the number of Canadians returning from the U.S. by car was down almost 32 per cent compared to March 2024, the third consecutive month of year-over-year declines.

Observers have suggested the weak loonie and anger over U.S. President Donald Trump’s trade war and annexation comments are helping drive down Canadian cross-border travel.

The agency says Canadian return trips by air from the U.S. were down 13.5 per cent last month compared to March 2024.

At Queen’s Park, Utah Governor Spencer Cox, who is leading a trade mission to Canada, tells reporters he wants to see Trump’s tariffs on Canadian products eliminated.

Premier Doug Ford will be on CNN with Wolf Blitzer at 11:15 a.m. and then meet with reporters at Queen’s Park to discuss Trump’s latest tariff moves.

Conservative Leader Pierre Poilievre slammed President Donald Trump at a news conference in Milton for his “historic mistreatment of Canada.”

“I condemn President Trump for keeping the tariffs on Canada all while he offered a 90-day pause on tariffs for dozens of other countries. It remains a mystery why the president treats Canada worse than dozens of other faraway countries who are not America’s best friend.” Poilievre went on to say it happened after his political opponent Mark Carney, the prime minister, “boasted that he made quote ‘progress.’ What progress? There are more tariffs, American tariffs on Canada today than there were” when Carney took office on Mar. 14, said Poilievre.

He said he doesn’t “blame” Carney for Trump’s tariffs, saying that nobody can control Trump, but he condemned Carney for offering a false promise.

“That’s why Carney’s biggest election promise and distraction are empty. He’s telling you to forget about the lost Liberal decade of rising costs, crime, taxes and housing prices because he’s somehow a magical negotiator. But we’re learning that that is not true. He does not control President Trump. No one does. What we do control is what we do here in Canada.”

Poilievre went on to say the Liberals, after a decade in power, cannot be trusted to make the right decisions to allow Canada to confront Trump from a position of strength.

Stock markets in North America plunged in early trading Thursday as traders continue to digest the impact of the growing U.S. trade war with China, and as tensions cooled down with Europe.

In Toronto, the TSX Composite Index tumbled 2.4 per cent by 9:35 a.m.

In New York, the S&P500 was 2.1 per cent, the Dow Jones industrial average was 1.7 per cent and the tech-heavy NASDAQ was off 2.7 per cent.

Overnight in Asia, markets were up, despite Trump’s decision to ramp up the trade war with China.

The Shanghai Composite Index was up 1.2 per cent, while Hong Kong’s Hang Seng Index was up 2 per cent. Japan’s Nikkei 225 soared, and closed trading up 9.1 per cent.

The European Union’s executive commission said Thursday it will put its retaliatory measures against new U.S. tariffs on hold for 90 days to match President Donald Trump ’s pause on his sweeping new tariffs and leave room for a negotiated solution.

Treasury Secretary Scott Bessent told reporters on Wednesday that the pause was not a result of the brutal sell-offs in the financial markets but rather because other countries are seeking negotiations. Trump later told reporters that he pulled back on many tariffs because people were getting “yippy” and “afraid.”

The chief executive of pipeline operator TC Energy says he believes Canada can be the No. 1 exporter of liquefied natural gas to Asia, but political leadership is crucial to making it happen.

“We have the supply, we have a transportation cost advantage and the demand is there for the taking,” François Poirier said in a speech Thursday to Canadian Club Toronto.

“Our leaders need to unite on this ambition — and show the world that Canada is back in business.”

Liquefied natural gas, or LNG, is gas that has been chilled into a liquid state, enabling it to be transported overseas in specialized tankers. Gas produced in Western Canada could sell for a much higher price in Asia than if it were to remain landlocked, and securing new buyers would reduce Canada’s reliance on the United States.

The futures market is pointing to losses for U.S. stock markets when trading begins today.

Canadian and U.S. stock markets rallied on Wednesday to post big gains after U.S. President Donald Trump paused his so-called “reciprocal” tariffs for 90 days but kept in place a 10 per cent levy on nearly all global imports.

Trump also increased tariffs on Chinese imports to 125 per cent.

For its part, China has imposed an 84 per cent tariff on incoming U.S. goods.

The weakness in the futures market came as European and Asian markets climbed higher following the latest U.S. tariff changes, which came Wednesday afternoon.

With the continued escalation of tariffs in the international trade war and the U.S. slapping increasing tariffs on imported Chinese goods, what does that mean for North American shoppers buying electronics like iPhones — items mostly manufactured overseas?

The Star spoke with an international trade expert to learn how and if consumers could be hit.

As it stands, the U.S. market is in a precarious position, said international trade expert and business professor at Ivey Business School, Andreas Schotter.

It’s worth noting, said Schotter, that Apple has been facing pressure on margins due to rising manufacturing costs, and “these tariffs could be the tipping point that leads to higher prices for consumers.”

Todd Rutter calls himself the “most non-tech person you’ve ever met” but he’s turning to technology and lessons learned during the COVID-19 pandemic to help weather the dizzying tariff policies of U.S. President Donald Trump.

The Edmonton-based co-owner of A Cappella Catering Co. said inflated food costs as pandemic restrictions started lifting years ago nearly killed his 35-year-old company, and he has to do everything he can to prevent the roller-coaster of changing U.S. tariff threats from doing it this time.

The company has created a spreadsheet to track the cost of the 100 most common ingredients they use in case there’s a need to implement a “tariff surcharge” on customers to keep the business afloat, he said.

At midnight Wednesday, Trump’s “reciprocal” tariffs kicked in on dozens of countries, including China, which was hit with a 104 per cent tariff on all its exports to the U.S. 

China announced Wednesday that it was responding in kind, levying an 84 per cent tariff on all imports from the U.S.

By midday, while most other countries were given a 90-day reprieve, the Trump administration further raised tariffs on Chinese goods to 125 per cent  in a tit-for-tat move, effective immediately.

In Toronto, the S&P TSX composite index bounced back and forth between loss and gain in early trading, but took off as soon as news of the pause became public shortly after 1 p.m. By market close its was up 5.4 per cent adding roughly $200 billion in value.

Stocks in New York were also mixed at the opening, then took off like a rocket in the early afternoon. By the time markets closed, the broad-based S&P 500 was up 9.5 per cent, the Dow Jones industrial average 7.9 per cent, and the tech-heavy Nasdaq 12.6 per cent.

It’s no coincidence the decision to pause the tariffs — reminiscent of earlier on-and-off tariffs against Canada and Mexico — came after several days of crashing markets, argued Saurin Patel, a finance professor at Western University’s Ivey Business School.

“I think it was a direct response to pressure from the markets and the public at large,” said Patel, who warned that markets could shift again just as quickly in the other direction. “This is a bizarre way of doing business, and it’s not the way you should be running a large economy.”

The pause, first announced by Trump on Truth Social, also comes after pressure from business executives and billionaire donors, said Paul Calluzzo, a finance professor at Queen’s University’s Smith School of Business.