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Canada Tariffs on US Goods and What They Mean for Your Trading Strategy
Apr 19, 2025
Consider this scenario: You run a business that imports raw materials from Canada to manufacture products sold to consumers in the United States. Your trading strategy relies on smooth, uninterrupted operations. But then, you hear about new tariffs Canada has implemented on US goods.
You aren’t sure if the new tariffs will affect your business, but you know the answer could change your next import order. Canada Tariffs on US Goods like these can impact trading strategies, and their significance can change with the political winds. This guide Trump tariffs 2025 will help you make sense of Canada’s tariffs on US goods and what they could mean for your business.
An organized approach can help you make sense of any new tariffs and how they might impact your trading strategy. GoMoon’s AI-powered economic calendar tracks global trade developments and their impact on the financial markets. The tool’s easy-to-read format breaks data into digestible pieces and helps you identify any correlations to your trading goals.
Table of Content
What Were Canada’s Tariffs on U.S. Goods Before 2025?
Canada’s Tariffs on U.S. Goods Before 2025: How They Worked
Before 2025, Canada maintained a largely tariff-free trade relationship with the United States, thanks to decades of economic cooperation in multilateral and regional trade agreements. However, there were notable exceptions and strategic responses that traders needed to understand. Here’s what the landscape looked like.
Canada Aligned Tariff Policies with Global Trade Norms
Canada aligned its tariff policies with international trade bodies like the World Trade Organization (WTO) and regional agreements such as the North American Free Trade Agreement (NAFTA), later replaced by the United States-Mexico-Canada Agreement (USMCA). These frameworks limited broad tariffs and encouraged free trade, especially with close partners like the U.S.
Zero Tariffs Were the Norm—But Not Universal
Most goods traded between Canada and the U.S. flowed without tariffs under NAFTA and USMCA. However, specific sectors remained protected: Dairy, poultry, and eggs faced high tariffs under Canada’s supply management system, even for U.S. products. Softwood lumber was frequently at the center of trade disputes, resulting in duties or countervailing tariffs being applied irregularly.
Canada Responded to Trump-Era Tariffs with Retaliation
In 2018, when former President Trump imposed 25% tariffs on steel and 10% on aluminum from many countries, including Canada, Ottawa responded with retaliatory tariffs worth CAD 16.6 billion on U.S. exports of Whiskey, maple syrup, orange juice, steel, and aluminum products. These actions were meant to defend Canadian industry and restore leverage in negotiations with the U.S.
Trade Disputes Shaped Temporary Tariff Shocks
Even with trade deals in place, disputes occurred regularly: The softwood lumber battle resurfaced multiple times, with the U.S. accusing Canada of unfair subsidies and Canada challenging duties through WTO and NAFTA/USMCA panels. Agricultural products, especially dairy, were a longstanding point of contention, as the U.S. pushed for greater access to the Canadian market.
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What Is Canada’s Tariff on U.S. Goods in 2025?
The Escalation of Canada’s Tariffs on U.S. Goods
In 2025, Canada took a bold and retaliatory stance by imposing heavy tariffs on U.S. goods, marking a serious escalation in cross-border trade tensions. This response follows the United States' aggressive tariff campaign targeting Canadian exports, which has reignited trade wars reminiscent of earlier Trump-era disputes.
The U.S. Sparked the Conflict
The trade battle began when the U.S. government, in early 2025, implemented a 25% tariff on nearly all Canadian goods entering the U.S. These included major exports such as steel, aluminum, and automobiles. A reduced 10% tariff was also imposed on Canadian energy and potash, critical sectors for Canada's economy. The justification? Washington cited trade deficits, national manufacturing revival, and border security concerns. However, Canada viewed these reasons as political posturing and violations of the USMCA (United States-Mexico-Canada Agreement).
Canada’s First Counterpunch – March 4 Tariffs
In response, Canada launched its first wave of retaliatory tariffs on March 4, 2025. These targeted approximately CA$30 billion (US$20.6 billion) worth of U.S. goods, focusing on consumer-facing items such as:
Household appliances
Liquor
Clothing and footwear
Furniture
Sports equipment
Perfume and other personal items
Fresh vegetables and grocery imports
This move was intended to hit U.S. manufacturers and exporters where it hurt, especially those in politically sensitive states.
Second Wave – Steel and Aluminum Tariffs
On March 13, 2025, Canada doubled down by slapping 25% tariffs on:
U.S. steel imports valued at CA$12.6 billion
Aluminum imports worth CA$3 billion
An additional CA$14.2 billion in tools, display monitors, servers, cast-iron products, and computers
This wave affected nearly CA$29.8 billion in U.S. goods, putting enormous pressure on American industrial exporters.
Third Wave – Auto Sector Crackdown
By April 3, 2025, Canada extended its tariff retaliation to the automotive industry, one of the most integrated and high-value trade sectors. The new measures included:
A 25% tariff on all fully assembled U.S. vehicles that don’t comply with CUSMA rules
A 25% tariff on U.S. vehicle components that were not sourced from Canada or Mexico, even if the vehicle as a whole meets CUSMA standards
Canada is also exploring incentive programs to shift auto production within its borders, signaling a longer-term strategy to reduce dependency on U.S.-based auto supply chains.
Not Just a Policy — A Political Statement
Under Prime Minister Mark Carney, the Canadian government has clarified that this is more than trade policy—it’s economic defense. Canada has emphasized that:
Tariff revenues will be redirected to support domestic industries, especially auto workers
Additional relief measures include waiving employment insurance waiting periods and deferring tax payments for affected businesses.
Canada’s actions aim to pressure the U.S. politically, targeting industries in key "red state" regions.
Impact and Duration
These tariffs are not temporary. Canada has pledged to maintain them until the U.S. removes its tariffs. A tariff war disrupts over US$2.5 billion daily trade, straining one of the world’s most significant bilateral economic relationships.
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or the COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
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How to Build a Strategy as a Forex and Crypto Trader Amid the U.S.-Canada Tariff War
Track Key Economic Indicators in Both Countries
To navigate the uncertainty associated with escalating tariffs between the U.S. and Canada, forex and crypto traders must monitor key economic indicators in both countries. The fundamentals are changing quickly, and both economies face inflationary pressures due to higher import costs. So, what indicators can help traders predict currency strength or weakness?
Forex traders should track
Interest rate announcements from the Fed and the Bank of Canada
Inflation rates, especially in manufacturing-heavy sectors
Trade balance reports that show changes in imports and exports
Employment data reflects how tariffs are affecting local industries.
These metrics can help traders anticipate how tariffs will impact the U.S. and Canadian dollars and inform trading decisions. For instance, if Canadian inflation spikes due to U.S. import tariffs, the CAD may weaken—a straightforward trade setup for CAD pairs.
Use Volatility to Your Advantage in Forex
Tariff wars breed uncertainty, and uncertainty breeds volatility. Smart traders can use this to their advantage.
Here’s how
Trade news cycles: Be active during major tariff announcements or policy shifts
Hedge currency pairs: Long USD/CAD while shorting EUR/CAD or AUD/USD can balance exposure
Tighten stop losses: Protect your capital during unexpected policy reversals.
Switch to high-liquidity pairs: Like USD/CAD, where the market reacts fast to trade headlines.
Remember
When tariffs are in play, sentiment drives price more than logic, meaning rapid reversals are common.
In Crypto: Leverage Bitcoin’s Safe-Haven Behavior
While crypto is decentralized, it’s not immune to global events. That said, Bitcoin and Ethereum often behave like alternative stores of value when fiat currencies wobble.
Here’s how to strategize
Watch fiat movements: A weak U.S. dollar due to tariffs can drive BTC and ETH inflows.
Use stablecoins smartly: Rotate into USDC or USDT during extreme volatility to preserve profits.
Don’t overleverage: Tariff war volatility can easily liquidate high-margin positions — keep leverage low.
Study correlation charts: BTC often rises when USD weakens — use this to time entries and exits.
In 2025, traders saw Bitcoin fall below $80k during early tariff escalations, but after the 90-day tariff pause, it rebounded, showing how tariff relief can trigger crypto rallies.
Adopt a Global Risk-Monitoring Mindset
You’re no longer just trading charts — you're trading geopolitical policy.
To stay ahead
Join macroeconomic news feeds and Discord groups focused on trade policy
Create a simple tariff dashboard using Google Alerts or RSS feeds for updates on U.S.-Canada developments
Follow trade policy analysts and economic journalists on X (formerly Twitter) for real-time insights
Log every major tariff event and its market effect in a trading journal — this becomes your cheat sheet for future events.
Use AI Tools Like GoMoon to Stay Ahead
GoMoon is built precisely for this type of dynamic environment. Here’s how you can leverage
GoMoon’s features
Real-time market alerts for forex and crypto shifts tied to geopolitical news
AI-summarized trade policy changes so you don’t miss critical developments
Strategy simulations based on past U.S.-Canada tariff movements
Backtested AI trade suggestions that align with your trading style and risk appetite
Custom notification filters that ping you for CAD or USD-specific tariff events With GoMoon, you’re not just reacting — you’re positioning yourself in advance of the market.
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or the COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
Use Our AI-powered Economic Calendar Tool for Free Today
Tariffs are taxes imposed on goods imported from abroad. When a tariff is applied, the importing country collects the fee, which raises the cost of the good. If the U.S. were to impose tariffs on Canadian goods, it would affect Canadian companies exporting goods to the U.S. and could slow the U.S. economy and hurt American consumers. Under the USMCA, if the U.S. imposes tariffs on Canadian goods, Canada would have the right to retaliate with its tariffs.
What's the Latest on Canada Tariffs on US Goods?
In August 2023, the U.S. announced it would reinstate tariffs on Canadian aluminum. Canada retaliated shortly after, imposing tariffs on aluminum products from the U.S. in early September. The U.S. tariffs stem from the government's concerns that an influx of aluminum from Canada could hurt American producers. Under the USMCA, the U.S. has the right to impose the tariffs initially set to expire in January 2022.
What Do Canada Tariffs on US Goods Mean for You?
If you buy products made from aluminum, you might notice an increase in prices in the coming months. The tariffs could also impact domestic manufacturers that utilize aluminum in their production processes. These companies may raise prices or slow production until the tariffs are lifted.
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or the COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
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