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Donald Trump's 25% tariff on Canada is part of his protectionist trade policies, aimed at addressing what he perceives as unfair trade practices. Trump believes that Canada, along with Mexico and China, has been "ripping off" the United States in trade deals.¹
The tariffs, which took effect on February 4, 2025, target various Canadian goods, except for crude oil and energy products, which are subject to a 10% tariff. This move has sparked concerns about retaliation from Canada and potential harm to the US economy.
*Key Reasons Behind the Tariffs:*
- *Unfair Trade Practices*: Trump claims that Canada's trade policies are unfair and harm American businesses.
- *Protectionism*: The tariffs aim to protect American industries and jobs from perceived unfair competition.
- *Economic Leverage*: Trump hopes to use the tariffs as leverage to renegotiate trade deals with Canada and other countries.
Canada has already announced retaliatory measures, including a $155 billion tariff package, in response to the US tariffs.² This escalating trade tension may have significant implications for both economies.