When President Trump returned to the White House in January 2025, he moved quickly to reshape U.S. trade policy, citing concerns ranging from fentanyl flows to national security. Over the course of the year, the administration issued more than 50 trade-related actions, culminating in the sweeping Global Reciprocal Tariffs announced on "Liberation Day." While most Canadian exports remained protected under CUSMA, steel, aluminum, automobiles, and softwood lumber were hit with steep sectoral tariffs. Canada initially retaliated, but rolled back most counter-tariffs through the year in the interest of easing tensions.
The impact is now visible in the data. Canadian exports to the U.S. have fallen 5.7%, the bilateral trade surplus has shrunk by nearly 20%, and the effective tariff rate on Canadian goods entering the U.S. has climbed to almost 10%. Exporters are beginning to look elsewhere, with non-U.S. destinations now accounting for 36.4% of Canadian exports. The automotive, steel, aluminum, and softwood lumber industries have absorbed the bulk of the pressure, shedding tens of thousands of jobs despite representing less than 1.5% of Canada's GDP.
With the 2026 CUSMA review underway, the future of one of the world's most effective trading partnerships remains uncertain. The infographic below highlights where things stand and what is at stake.
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Citation: Sanchez, Andres., Nanji, Mahmood., Agoston, Zsofia. (2026). Canada-U.S. Trade and Investment Infographic Series: 26505 (Mostafa, Romel Ed). Lawrence National Centre of Policy and Management, Ivey Business School, Canada.
To learn more, explore our Canada-U.S. Trade and Investment in the Midst of a Trade War Infographic Series.