Business Daily — Has Canada Lost Its Trade War with the US?

BBC World Service, October 13, 2025
Host: Sam Grouet

Episode Overview

This episode investigates the aftermath of the recent trade war between Canada and the United States, following Canada’s decision to remove most retaliatory tariffs against US goods. Host Sam Grouet explores the economic and social impact of seven months of cross-border tariffs, the government’s rationale for the policy shift, and what the future of Canada-US trade may hold from the perspectives of citizens, business leaders, and industry stakeholders.

Key Discussion Points & Insights

1. The Timeline and Escalation of the Trade War

• The trade conflict began after the re-election of Donald Trump, the 47th US president, who imposed tariffs to bolster American manufacturing (02:06).
  • Trump: “Over the next four years, we will make America into the manufacturing superpower of the world.” (02:18)
• The US initiated a 25% levy on Canadian imports; Canada responded with counter-tariffs.
• Mark Carney, newly elected Canadian Prime Minister in March 2025, vowed not to back down, resisting the US measures (02:44).
  • Carney: “President Trump is trying to break us so that America can own us. That will never, that will never, ever happen.” (02:52)
• August 1st: The US increases tariffs to 35% on specific Canadian exports (03:02).

2. Canada’s Tariff Pullback & Its Implications

• Carney’s government relaxes tariffs on US goods, arguing that exemptions under USMCA (United States-Mexico-Canada Agreement) provide Canada with a strong trade arrangement (03:18–03:40).
  • Everyday items such as groceries, appliances, clothing, and electronics can now cross the border tariff-free while Canada renegotiates USMCA.

3. Public Sentiment in Toronto

• Many Canadians are changing their consumer habits, favoring domestic or non-US goods due to sentiment, not always price (04:02–05:04).
  • Jane (Toronto resident): “Anything that we’re buying, we say we want it Canadian made or made in Mexico or... But we’re staying away from buying US produce, food, anything coming from that, anything made in the States.” (04:28)
  • There’s a noticeable reluctance to travel to the US, with Canadians choosing to vacation and spend at home (04:53).
• On whether Canada lost the trade war after dropping tariffs:
  • Cassie (Toronto resident): “Not really. ...We have some things that they really need. One is water, one is oil. And what is electricity? ... we don’t need them as much as they think they do.” (05:08)
  • Some feel Canada is resilient and can leverage its natural resources.

4. Mixed Reactions from Canadian Business Community

• Catherine Fortune Lefebvre (Canadian Chamber of Commerce):
  • Tariff removal reduces costs for some sectors but frustrates others, especially auto, aluminum, and steel (07:01).
  • Necessary to resume trade talks with the US administration:
    • “There needed to likely be movement on the trade front, on the discussion front, and things were stalling.” (07:49)
  • The upcoming USMCA review in July 2026 is a significant motivator for current policy maneuvers.

5. Effects on Canadian Exporters

• 27% of Canadian exporters have deprioritized the US as their primary export market; nearly 40% have diversified away from US supply chains (09:21).
  • Lefebvre: “We have to, you know, not rely so heavily on the U.S.... we need to do more to hedge our bets and to make more friends and go outside of the U.S.” (09:21)

6. On the Ground: Ontario’s Forest Industry

• Ian Dunn (President & CEO, Ontario Forest Industries Association):
  • The lumber sector is still hit hard with a 35% tariff, suffering dual pressure from both import and export duties (12:48–13:49).
    • “For a lot of our members ... they were paying tariffs at the border to pull [US-sourced] product in. And for lumber producers, they were paying duties to sell that product back into the American market. So they're getting hit on both sides.” (12:48)
  • Ontario lost 38,000 jobs in Q2 2025, 30,000 in manufacturing alone, with industry employment reduced by half over the past 20 years (14:15–14:36).
    • “His family has held a license to cut timber ... for 110 years and he's had to shut down his sawmill. ... It's more the compounding challenges that many, many companies face.” (14:36)

7. Short & Medium-term Outlooks

• Dunn: Remains optimistic, believing President Trump could strike a deal favorable to Canada if the opportunity arises (15:36).
  • “The Trump administration, I think, has demonstrated that they're not beholden to anyone. So if there's a deal to be made, I think President Trump would be very interested in that.” (15:36)
• Despite optimism, nearly 40% of Canadian small businesses said they might not last another year under the old tariff regime; 60% are burdened by higher costs (15:56).

8. Small Business Perspective: Regimen Labs

• Alex Apostolopoulos (Co-founder, Regimen Labs, Toronto):
  • Describes recent months as “chaos,” with uncertainty and rapid change disrupting planning, especially for smaller businesses (16:30–17:20).
  • Unexpectedly, Canadian consumer patriotism boosted domestic sales, with the Canadian market now matching the US in revenue for the first time (17:26–18:44).
  • Alex urges a focus on strengthening the Canadian economy, boosting productivity and innovation, rather than retaliatory trade measures (19:00).
    • “As much as I want to tell the government ... push back, play a bit of a game of chicken ... the only thing that we can be certain of is our economy here.” (19:00)

9. Looking Ahead: Trade Renegotiations

• As of episode recording, Carney and Trump had met in Washington; no new deal reached yet.
• Anticipation builds for the 2026 USMCA renegotiation, seen as pivotal for future Canada-US economic relations (19:29).

Notable Quotes & Memorable Moments

• Mark Carney: “President Trump is trying to break us so that America can own us. That will never, that will never, ever happen.” (02:52)
• Cassie (Toronto): “We don’t necessarily need the US as much as they need us.” (06:12)
• Ian Dunn: “We have members in our association that have reduced shifts, laid people off. We have a member, his family has held a license to cut timber in the province of Ontario for 110 years and he's had to shut down his sawmill.” (14:36)
• Alex Apostolopoulos: “Very honestly. Just chaos is what I would, what I would describe that as. No one really knows what to do...” (16:58)
• Alex Apostolopoulos: “We’ve tripled our revenue in Canada and that’s continued.” (18:03)
• Alex Apostolopoulos: “The only thing that we can be certain of is our economy here. ... There really is a lot that we can do to improve productivity and innovation in this country.” (19:00)

Timestamps for Key Segments

| Timestamp | Segment Description | |-----------|-------------------------------------------------------------------------------------| | 01:14 | Canadian Government announces removal of most tariffs on US goods | | 02:06 | Review of US-Canada trade war escalation (Trump’s tariffs and election context) | | 04:02 | Toronto citizens’ perspectives on buying habits and travel | | 06:04 | Views on Canada’s rationale for dropping tariffs, debate on who “won” | | 07:01 | Chamber of Commerce’s view on the business impact and the need for trade talks | | 09:21 | Data on export market and supply chain diversification by Canadian businesses | | 11:30 | Interview with Ian Dunn, impact on Ontario’s forest sector | | 12:48 | Details on lumber tariffs and their impact on the industry | | 14:36 | Historic job and investment loss in Ontario’s forest industry | | 16:30 | Visit to Regimen Labs, small business adapting to trade disruption | | 17:26 | Surge in Canadian consumer patriotism and its effects | | 19:29 | Update on Carney/Trump meeting and anticipation for renewed trade talks |

Conclusion

This episode of Business Daily weaves together government, business, and citizen perspectives, painting a nuanced picture of Canada’s evolving trade relationship with the US. While the recent removal of tariffs may appear like a concession, interviews and data reveal a strategic recalibration, focused increasingly on economic self-reliance, diversification, and innovation ahead of crucial 2026 USMCA renegotiations. The tone throughout is one of pragmatic resilience—balancing costs and losses with hope for a more stable, mutually beneficial trade future.