What a week — and get used to it. If there’s one lesson from recent events, it’s that tariffs are now the new normal, whether we like it or not.
In just a few weeks, the United States under President Donald Trump has leveraged tariffs to escalate tensions with several countries, including Colombia, Mexico, and, of course, Canada. Critics argue that no country has caved to U.S. pressure, but the reality is quite different. We have.
Before Trump, issues like fentanyl, border security, and economic czars were rarely discussed in the mainstream. Now, they dominate policy conversations. And this is just the beginning.
But this is not just about Canada — it’s about something much bigger.
Canadians feel betrayed, and rightfully so. Canada never provoked the United States, and Ottawa’s retaliatory measures were warranted. The rise of the “Buy Canadian” movement in grocery stores may provide a temporary patriotic boost, and renewed discussions about dismantling interprovincial trade barriers are promising.
However, history suggests that these efforts will fade, as they always do. Political will is fleeting, and without strong incentives, provinces will maintain their grip on economic power — particularly Quebec, which has consistently positioned itself as distinct within the federation. The same applies to Ontario, whose economic policies significantly impact food trade across the country.
Economically, tariffs are a poor policy tool. They ultimately harm everyone, especially the domestic population of the instigating country. Even Trump likely understands this. However, what distinguishes this administration is the president’s firm belief that the Bretton Woods agreement of 1945, which established the multilateral trade system, was a raw deal for the United States. In his view, what benefits the world does not necessarily benefit America.
Trump’s skepticism toward free trade is not new. Having built his fortune largely in real estate and media — industries reliant on domestic markets rather than global trade — he has long seen America as a self-sufficient economic powerhouse. His perspective dates back decades; on Sept. 2, 1987 he published an op-ed in several major U.S. newspapers arguing that trade agreements were weakening the United States by effectively subsidizing global peace. Sound familiar? His economic philosophy is centred on one-on-one negotiations, treating trade as a zero-sum game rather than a cooperative system. We saw glimpses of this during his first term, but it is now more apparent than ever.
According to the World Trade Organization, Canada is the ninth least protectionist country in the world, with the United States ranking just above in eighth place. The least protectionist nations — Singapore, Hong Kong, Macao, Brunei, and Chile — are followed by New Zealand, Australia, and Japan. In other words, North America remains relatively open for business, with one major exception: Canada’s supply management system, mainly our dairy monopoly. With tariffs exceeding 300% on certain dairy products, Canada’s protectionist stance in this sector stands out. It’s no surprise that Trump has it in his crosshairs.
But supply management is not just a trade issue — it is central to Canada’s long-standing interprovincial trade barriers. While politicians frequently call for a freer domestic market, the reality is that supply management itself is a structural roadblock. Provincial boards, backed by quota allocations and regulatory power, hold significant sway over the dairy industry, reinforcing regional monopolies that make real change virtually impossible. This is why, despite political rhetoric, meaningful progress on interprovincial trade barriers remains elusive. Dismantling these barriers would require a complete overhaul of how supply management operates, something few governments have the appetite to pursue.
Most Canadians dislike Trump — his style, his rhetoric, and his policies — but the reality is that he wields immense economic power. The United States accounts for nearly 25% of global GDP. Meanwhile, Ontario, Canada’s most populous province, has productivity levels comparable to Alabama, one of the poorest U.S. states. Under these conditions, Canada is in no position to win a trade war with its largest trading partner.
Contrary to what many believe, Trump is not economically reckless. His first term saw significant economic growth in the U.S., and it is likely that his policies will drive further expansion. He may impose tariffs on select industries, but he is unlikely to target the agri-food sector. Given its slim profit margins, any tariff-related disruption could severely harm farmers, food processors, and, most importantly, consumers — within days. However, Trump will undoubtedly use tariffs as a strategic weapon wherever he sees fit.
Canada must brace for this reality. What is truly concerning is that, despite typically benefiting from a strong U.S. economy, Canada is currently missing out due to its own productivity challenges. With little economic growth to speak of, Canada is not positioned to capitalize on American prosperity.
If we are serious about economic resilience, we must address domestic inefficiencies, starting with supply management and interprovincial trade barriers. Until then, expect more talk, little action, and a continued uphill battle against protectionism on both sides of the border.
— Dr. Sylvain Charlebois is the Director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast.