President Donald Trump has designated April 2 "Liberation Day" as the U.S. implements new tariffs on its global trading partners, further straining international trade relationships.
In response to the Trump administration's tariffs, Canada announced that it will impose retaliatory export tariffs starting April 2, raising concerns that decades of free trade between the two nations may be disrupted. This move adds to existing retaliatory tariffs from China and could significantly affect various sectors of the U.S. economy.
Since Inauguration Day, the Trump administration has enacted a series of tariffs: a 20% tariff on all Chinese products, a 25% tariff on most Mexican and Canadian goods and a 25% tariff on steel and aluminum imports from all countries.
Alex Durante, a senior economist with the Tax Foundation, warned that these import tariffs are harmful not only to U.S. exports but also to domestic production.
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"A lot of these imports that are targeted by these import tariffs are used as inputs into the production of goods that are then exported," Durante said. "So, the import tariffs also hurt our exports, and on top of that, you have the retaliatory tariffs which are directly targeting our exports. From both ends, U.S. exporters are getting walloped."
Farmers are expected to bear the brunt of these trade tensions. According to the American Farm Bureau Federation, Canada and China were the second and third-largest destinations for U.S. agricultural products in 2024.
The organization's analysis indicates that retaliatory tariffs could target nearly $27 billion worth of U.S. agricultural goods, with significant impacts on soybeans, beef, and cotton.
Betty Resnick, an economist with the American Farm Bureau Federation, cautioned that such economic disruptions could lead to a continued decline in the number of farms across America.
"Anything that can affect the economy of farms, like this situation we're in now, will likely lead us to see the continued decline in the number of farms in America," Resnick stated.
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She emphasized that the effects of these tariffs could eventually trickle down to consumers.
Retaliatory tariffs could decrease demand for U.S. goods, impacting production and farmers' bottom lines and increasing prices in stores.
"If we're radically shifting the demand structures for these agricultural products, that's going to take a long time for farmers to adjust to," Resnick said.
The automotive and energy sectors may also feel the repercussions of the new tariffs. Energy exports to Canada represent the largest share of U.S. exports, with demand reportedly increasing by 70% year-over-year, according to the U.S. Energy Information Administration.
Earlier this month, Ontario Premier Doug Ford announced a 25% surcharge on electricity sent to New York, Minnesota, and Michigan, which he estimated would raise monthly bills by approximately $100 for Americans in those states.
This story was initially reported by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
