Trump’s Canada tariffs backfire as firm flees Texas and US costs soar

President Donald Trump greets Prime Minister of Canada Mark Carney, Tuesday, May 6, 2025, at the West Wing entrance of the White House. (Official White House Photo by Gabriel B Kotico/Flickr)

President Donald Trump’strade war with Canada is costing U.S. importers billions of dollars and has driven one Canadian company out of Texas.

Customs duties on Canadian imports soared to roughly $10 billion in 2025, up from about $400 million the year before, a nearly 25-fold increase, according to Congressional Research Service data cited in a Newsweek report on Thursday. Those duties applied to about $56 billion worth of goods from Canada.

Gary Cohn, a former top economic adviser to Trump who is now IBM’s vice chairman, said the tariffs are “a consumption tax on the U.S. consumer.” He suggested that Congress could maintain protections against unfair trade practices from China while dropping the tariffs on Canada.

A Canadian distillery, Rig Hand Craft Distillery in Alberta, has closed a packaging facility in Texas because of worries about tariffs and lost contracts in Texas, Arizona and Alaska. Quebec’s RefPlus lost a $1.6 million order because a U.S. customer was afraid tariffs would be imposed before the equipment was delivered, even though the equipment was not subject to tariffs.

Mark Wiseman, Canada’s ambassador to the United States, said this week that the tariffs are making the United States a costlier place to do business. At the B20 summit in Washington on Wednesday, he said that the uncertainty surrounding trade increases the cost of capital and reduces the incentive for companies to invest in factories, equipment and research. He called for a speedy return to freer trade.

The stakes are high. In 2025, Canada was the United States’ second-biggest trading partner and its third-largest source of foreign direct investment, with $747 billion invested in the U.S. Canada also supplied 64 percent of U.S. crude oil imports by volume. Tariffs on cars, steel, aluminum and lumber have created additional costs for interlinked supply chains, including homebuilding.

Trump’s trade war with Canada has been escalating for months. In August, Trump imposed 50 percent tariffs on select products from Canada. Canada retaliated by placing tariffs on around $20 billion worth of U.S. goods in September. A U.S. import ban on certain Canadian products went into effect a few weeks after that.

Some Canadians are fuming, too. A survey by Leger showed that 38 percent of Canadians see the United States as an enemy, compared with 20 percent who say they see the U.S. as an ally.

The White House is not blinking. Jim Goyer, the director of the White House Office of Public Liaison, defended the tariffs at the same summit and said the administration plans to stick to its approach for the remainder of Trump’s term, signaling that more is on the way. Still, most Canadian imports into the United States remain duty-free.

Democrats plan to challenge Trump’s tariff policies once the new Congress convenes in January, but Trump has the power to veto any bill that would seek to roll back his tariffs.

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