When former U.S. President Donald Trump imposed steep tariffs on Canadian steel and aluminum in 2018, the move was widely seen as a blow to cross-border trade. But years later, some analysts argue those tariffs may have inadvertently strengthened parts of Canada’s industrial sector.
The Tariff Shock
In 2018, the U.S. slapped Canada with a 25% tariff on steel and 10% on aluminum, citing national security concerns—a claim Ottawa fiercely rejected. The move disrupted supply chains and sparked fears of economic fallout. Canada retaliated with $16.6 billion in counter-tariffs on U.S. goods, from whiskey to orange juice.
An Unforeseen Benefit
While the tariffs initially hurt Canadian producers, they also forced industries to adapt. Some key outcomes:
- Increased Domestic Investment: Facing uncertain U.S. market access, Canadian manufacturers invested more in local processing and production.
- Diversified Trade: Companies sought new markets in Europe and Asia, reducing reliance on the U.S.
- Stronger Supply Chains: The crisis accelerated efforts to make Canadian industry more self-sufficient.
Mixed Legacy
The tariffs were lifted in 2019, but their impact lingers. Some economists argue the pressure spurred long-term resilience, while others say the short-term damage outweighed any benefits.
As trade tensions between Canada and the U.S. persist, the episode serves as a reminder: in global trade, even punitive measures can sometimes yield unexpected advantages.
— With files from CBC News
