The Canada-US trade war - and to be clear, trade war is a recognized form of inter-state warfare - didn’t start on Jul. 1, 2026 with the US announcing their intent not to renew CUSMA, nor did it begin on Apr. 3, 2025 (Liberation Day).
For Canada, the trade war started less than 2 weeks after Trump’s 2nd inauguration.
On Feb. 2, 2025, under the justification of ‘halting the flow of illegal immigrants and fentanyl into the US’, Trump imposed a near universal 25% tariff on imports from Canada, with only 10% tariffs being imposed on energy imports. Several days later, Canada responded by imposing counter-tariffs, the only country to do so aside from China.
That was over 18 months ago. Since then there as been a flood of new tariffs, deadlines, negotiations, announcements, social media spats that have muddied the waters to such a degree that it’s easy to lose sight of how we ended up here in the first place.
Now with the looming Aug. 19th ‘wildfire tariff’ deadline absorbing the attention of the mainstream media & social media commentary, I want to take a step back and put this latest episode into the broader context of the ongoing political drama that is the Canada-US trade war.
To do that, let’s start with one simple question:
What Caused the Trade War?
`Why did Trump impose tariffs on Canada in the first place?
The Canada-US trade war, like any war, didn’t start out of the blue. The inciting incident, from my perspective, were the IEEPA ‘fentanyl’ tariffs, but it’s also not entirely accurate to say that Feb. 2, 2025 was the ‘start’ of the trade war either.
However pinning down the exact cause of the war is a bit more tricky.
Of course the easy answer is to point to Trump’s irrational behaviour and explain away his actions by calling him a moron, a lunatic, a mentally unwell grandpa. However this rationale flattens the genuine nuances & complexities of the situation. It dismisses the statements & actions of Trump & his team prior to Feb. 2, which also flattens the effect that those words & actions have had on Canadian society, and thus the response of the Canadian people & government.
In my view, there are several causes for why Trump imposed the IEEPA ‘fentanyl’ tariffs that kicked off the whole Canada-US trade war, but let’s start with the easiest one to dissect:
Fix the Budget by Taxing the Poor
To make a long, complicated, boring story short, Trump & his administration needed to raise a lot of money to fund the US government & pay the interest on the US debt; interest payments on the US national debt now exceeds the US military budget.
However Trump’s well-documented obsession with tariffs as a perceived solution for trade deficits and the political costs of raising taxes meant that their options available to finance the government are limited.
In that context, the solution that emerged wasn’t funding the IRS, reforming the US tax code, or taxing Trump’s rich buddies & the GOP’s political donors. Instead, Trump & his administration implement broad sweeping tariffs on nearly all imports coming into the USA. Because tariffs are just import taxes paid by importers, businesses are incentivized to pass the cost of tariffs onto the US consumer base. At the same time, the GOP-aligned media and the Trump administration spread misinformation by telling people that ‘other countries’ are the ones paying tariffs rather than US importers, and by extension consumers.
TL;DR:
Trump imposed the IEEPA ‘fentanyl’ tariffs, the Liberation Day tariffs, and the most recent Section 301 ‘forced labour’ tariffs, because he’s using tariffs to fund the US government budget.
Tariffs are a way of taxing the US citizenry without having to use the word ‘tax’.
While this makes sense from the perspective of the current US administration, it’s still leaves a lot unanswered. For example, it doesn’t explain why Trump is going after Canada with targeted Section 232 tariffs on steel, aluminium, copper, autos, and pharmaceuticals, or the Section 338 ‘wildfire’ tariffs.
Which brings us to the next contributing factor to the trade war:
CUSMA Re-negotiations
On Jul. 1, 2026, the Jameson Greer, the Trump administration’s trade representative, announced that the US would not be renewing the CUSMA agreement; CBC Article. Trump himself said “we do better as a country if we don’t have an agreement”, a heel-turn from “best agreement ever” stance in 2020; CBC Article.
To clarify, despite all the noise surrounding the US ‘pulling out’ of CUSMA on Jul. 1, 2026 deadline, the US hasn’t just ‘walked away’ from CUSMA. Rather what the US has done is declined to extend CUSMA in it’s current form until 2042.
This decision has triggered a yearly review & renegotiation process baked into CUSMA, where Canada, Mexico, and the US will conduct yearly re-negotiations until they agree on changes to CUSMA, or until the agreement expires in 2036.
While under review, CUSMA still remains in effect until the end of 2036.
Again, while it’s easy to explain this away by calling Trump a hypocritical moron, it’s important to consider why Trump would take a blatantly contradictory stance like this.
Tariffs aren’t a one-note tool. Tariffs are import taxes, and taxes are a versatile tool that government can use to incentivize market behaviours & effect outcomes. Taxes can be imposed selectively, targeting specific products, services, imports, and exports; As is the case with how tariffs are being employed to pressure Canada on CUSMA negotiations.
In Canada & Mexico, both government and industry groups want to keep CUSMA in place, whether it be until 2036 or until 2042. Likewise, the business community in the USA is still largely in favour of keeping CUSMA in place; Source; CBC.
However Trump doesn’t represent the interests of US businesses & industry. Trump sees himself as a business man & a hard-ball negotiator; a real estate tycoon. He wants to put pressure on the other parties involved to get the best ‘deal’ for ‘himself’/’his team’. Hence sectoral tariffs. He’s using tariffs to apply pressure to Canada & Mexico as leverage during the CUSMA renegotiation process.
This isn’t the first time that Trump has used tariffs as leverage during free trade negotiations with Canada & Mexico either. Back in 2017, during Trumps’ 1st presidency, he imposed Section 232 tariffs on Canada & Mexico during NAFTA renegotiations. Those Section 232 tariffs remained in place until 2018, when the reworked, rebranded USCMA - or CUSMA - agreement was signed; Global News Article.
That’s what the Section 232 sectoral tariffs and the Section 338 ‘wildfire’ tariffs are about. Trump imposed targeted tariffs on specific sectors in the Canadian economy as a form of coercive economic pressure to ‘get a better deal’ with Canada during CUSMA negotiations.
TL;DR: Trump is rehashing the same Trade negotiation strategy he employed the last time he did this with NAFTA:
Announce you’re dissatisfied with the ‘old deal’
Apply tariffs on strategic sectors of the other partner country’s economy
Use the resultant economic pressure to extract concessions at the negotiating table
However there’s still something else missing here.
The noise about Trump not renewing CUSMA didn’t get much attention until late 2025, and didn’t reach a head until Jul. 1, 2026 when Jameson Greer announced the US wouldn’t be extending CUSMA.
Yet if we check the timeline of events, Trump imposed tariffs on Canada starting on Feb.2, 2025. The Canada-US trade war didn’t start because of CUSMA, that only entered the conversation and became the primary narrative after months of ongoing economic conflict.
So the next logical question is, why did Trump start the trade war in the first place?
It’s time to address the elephant in the room, the real reason behind the Canada-US trade war, the reason that all the Canadians in the audience have been looking for from the start:
The 51st State
What was the reason Trump began his economic war on Canada?
It all began with the 51st State.
I’ll cover the effects of the 51st State rhetoric on Canadian society in more detail in the next article. Suffice to say, Trump’s vision for the USA to annex Canada is the primary cause of the trade war, and is the primary cause of the most radical shift in Canadian society since the end of WWII.
For now, let’s start at the beginning. Let’s consider the context in which the 51st State rhetoric emerged. After all, when & where this rhetoric came from matters just as much as the rhetoric itself.
Where It All Started
The first time the words ‘51st State’ caught on in Canadian media were on Nov. 20, 2024 at a Mar-a-Lago dinner party, where Trump ‘joked’ to Justin Trudeau that Canada should become the 51st State if we couldn’t handle the economic effects of a 25% tariff on Canadian goods.
At the time, the comments were dismissed as a joke by then Public Safety Minister Dominic LeBlanc; CBC Article.
However once he was in the white house, Trump continued to make comments about making Canada the 51st state.
Trump’s 51st State idea was a primary issue discussed during Carney & Trump’s first official meeting in May 2025; Carney says Canada ‘not for sale’ after Trump pushes 51st state in Oval Office meeting.
He talked about making Canada the 51st State in an address to the top brass in the US military on Sept. 30, 2025; Trump returns to ’51st state’ rhetoric in speech to U.S. military officials.
At Davos in March 2026, following Carney’s historic speech, Trump once again floated the idea of making Canada the 51st State; Trump calls for Canada to become 51st state in address before world leaders.
This is only a very small sample of the news coverage on the topic, but it illustrates the point that Trump has yet to truly ‘let go’ of the 51st State idea.
It became crystal clear early on that Trump wasn’t joking about annexing Canada, despite the mainstream US media and political pundits insisting that it wasn’t anything serious. By contrast, the response from Canadians was crystal clear.
Hell no.
According to a Leger poll published Dec. 10, 2024, 82% of respondants replied they would not like Canada to become the 51st state of the United States, as compared to 13% who would.
On Mar. 11, 2026, Angus Reid released a more comprehensive analysis where 90% of respondants said ‘No, Canada should not join the US’, with 54% of respondants saying ‘Trump is serious about annexation threat’ as compared to 34% in Jan. 2026.
If you want more examples for how Canadians feel about joining the US, then I recommend you peruse the comment section of any video on YouTube, TikTok, or Instagram covering the subject. It’s obvious that Canadians overwhelmingly reject the idea of joining the US.
So then why was Trump so insitent on annexing Canada?
Why does he continue to pursue the 51st State idea months after Canadians have made it clear we don’t want in?
A Real Estate Developer’s Dreams of Empire
Why is Trump so insistent on the USA annexing Canada?
In my opinion, this is a situation where Occam’s Razor applies, where the simplest answer is most likely the correct one. During this interview in March 2025 when discussing the 51st State, Trump - completely unprompted - says this:
“When you take away that artificial line that looks like it was done with a ruler... When you take away that, and you look at that beautiful formation of Canada and the United States, there is no place anywhere in the world that looks like that. It’s so good. And then if you add Greenland, it’s even better. It’s pretty good looking.”
Donald Trump, Mar. 11, 2025; @1:24 - 1:57
Trump made similar comments during his first Oval Office meeting with Carney:
“It’s beautiful. As a real estate developer, y’know I’m a real estate developer at heart, when you get rid of that artificially drawn line - somebody drew that line may years ago with, like, a ruler. Just a straight line right across the top of the country. When you look at that beautiful formation when it’s together, I’m a very artistic person, but when I looked at that beautiful... I said that’s the way it was meant to be.”
“But, y’know, I do feel it’s much better for Canada.”
Donald Trump, May 6, 2025; @1:27-1:59
I highly recommend that you all listen to this clip from Carney & Trump’s first meeting here, because this 30 second clip explains Trump’s 51st State rhetoric better than anything else.
If this isn’t convincing enough for you, Trump out-and-out said he intended to use economic force to make Canada the 51st state on Jan. 6, 2025 - 4 days before he was inaugurated for his 2nd presidential term; CityNews Article.
Interviewer: “Are you also considering to use military force to annex and acquire Canada?”
Trump: “No. Economic force, because Canada and the United States, that would really be something. You get rid of that artificially drawn line, and you take a look at what that looks like, and it would also be much better for national security.”
In Trump’s mind, the 51st State concept is first and foremost about aesthetics, about the ‘beautiful’, ‘artistic’ lines on a map. All the post-facto justifications are attempts to rationalize & rebrand the concept as something else besides the delusional fantasy of a geriatric, real-estate developer.
TL;DR:
The cause of the Canada-US trade war is because Trump wants to use “economic force” to annex Canada, something he openly stated 4 days before his 2025 inauguration.
The reason Trump wants to annex Canada (and Greenland) in the first place is because he likes the way the USA looks on a map if Canada & Greenland are a part of the United States. It’s as simple as that.
Conclusion; the ‘Wildfire’ Tariffs in Context
So, given the broader context of the Canada-US trade war, what should we make of the Section 338 tariffs and the Aug. 19, 2026 deadline?
When viewed within the context of CUSMA trade negotiations, these latest Section 338 ‘wildfire’ tariffs are an ‘Art of the Deal’-esque tactic that the Trump administration is using to apply pressure to Canada into making concessions on ‘trade irritants’ like the ‘booze ban’, dairy supply management, and the repatriation of auto manufacturing.
However, with the context of Trump’s ambitions to expand the borders of the USA, the tariffs are just one more blow in the Trump administration’s attempt to economically cripple, dominate, and subjugate Canada.
However, Canadians aren’t ignorant to this reality. I bet that most of my Canadian readers are already well aware of everything I’ve said up to this point. There’s a reason that Canadians are digging in our heels and fighting back against the US rather than simply capitulating; "going along to get along."
But how exactly have Canadians reacted to the annexation threat & economic coercion?
How has Carney rallied Team Canada to fight back against the economic coercion from the US?
And most importantly, is Canada’s economic wartime strategy working?