Trump’s tariffs on Canada: What it means for Alberta and U of C students
By Abbas Hussain and Vama Saini, March 23 2025—
One of Trump’s promises coming into office for his second term was to make sure that everyone paid their fair share, and the consequences of that has been the introduction of 25 per cent tariffs on the U.S.’s two closest trading partners, Canada and Mexico. The tariffs were initially supposed to go into effect on Feb. 1, but they were reintroduced on Mar. 4, after getting some concessions to postpone the introduction of the tariffs. In an interview with the Gauntlet, Dr. Carlo Dade, an economist at the School of Public Policy, talked about the effects of the tariffs on Canadians.
According to Dade, the immediate effect is psychological — anxiety and uncertainty ripple through the Canadian economy and its trade sectors. Canada has always had a strong relationship with the U.S. The tariffs have come as a shock to Canadians.
Historically, the last major tariff dispute of this magnitude occurred in 1971 under President Nixon’s New Economic Policy. Even during Trump’s first administration, trade tensions remained less severe than what Canada faces now.
Economically, the long-term effects remain uncertain, as the Trump administration frequently shifts in policy direction.
There are lots of different groups within the America First movement who are pushing for tariffs for their own reasons. However, a key concern is the pressure on Canadian businesses to relocate to the U.S. to avoid tariffs.
“What the Americans are doing is attempting to change the structure of decision-making, there isn’t a reason to remain in Canada if you face the threat of tariffs. What Trump has done is create long-term uncertainty for investment in Canada, […] this time it’s more well organized.” Dade said.
A broader concern is whether these tariffs will set a precedent.
“Will this continue under future administrations? Will this create an expectation among the American political class and voters that this is a tool that should be used in the future?” Dade questioned.
For Alberta, the tariffs highlight the need for economic diversification and reduced reliance on the U.S. market. Dade noted that Alberta has started addressing internal trade barriers and expanding trade infrastructure.
“It’s forced us to wake up in ways that would benefit [my] generation — benefits I won’t see but you will,” Dade said.
Dade emphasized that Canada must shift its approach to understanding the changing U.S. political and economic landscape, with the need to understand the new actors in the U.S. instead of just continuing to assume that the U.S. of old is still the same U.S. Dade hopes to see meaningful research on the “new America” at the School of Public Policy.
Dade spoke on the larger impact specifically for students.
“The larger impact will be on the Americans. Obviously, they are taxing themselves with the tariffs, not taxing us. It’s the Americans who are going to feel the larger brunt, because things they buy, like a home, you need Canadian soft lumber. Largely, you are going to see things where you buy them from the U.S, if and only if we impose retaliatory tariffs,” said Dade.
The larger impacts won’t be felt on students for a while, inputs into making goods that we will buy from the U.S. and those with jobs tied to the U.S.
“For right now, don’t panic. There will be the odd thing that gets more expensive, food will get a bit more, but largely you should be okay in the short term,” said Dade.
According to the Bank of Canada, if the worst-case scenario unfolds, Canadians can expect to feel the full economic effects within a year.
Learn more about how the tariffs are affecting Alberta here.