President Donald Trump expressed optimism about resolving the US-Canada trade war, stating that 'a deal with Canada could come fairly soon' during a meeting with Irish Prime Minister Micheál Martin in Dublin. When asked about leaving the US-Mexico-Canada Trade Agreement, Trump sidestepped the question and emphasized that 'Canada wants to make a deal very badly' while seeking better terms for US farmers. Trump specifically highlighted the issue of 'tariffs on our farmers - they're charging our farmers tariffs', adding that 'Canada has to treat our farmers better. They can't charge our farmers tariffs' and 'You'll probably see a deal with Canada fairly soon.' However, Trump provided no details about whether formal talks between the two economies have resumed. In his latest remarks, Trump stated that 'Canada has to treat our farmers better, and they can't charge our farmers tariffs. They're charging our farmers 400% tariffs and many other things, so when those things go away, they're willing to get rid of it all.'
The trade dispute has intensified significantly since August 2025, when Prime Minister Mark Carney walked away from trade talks with the Trump administration after describing the US offer as 'unfair' and 'uneconomic'. The US Trade Representative announced this week that Canada had walked away from what Washington described as a near-final trade deal and announced further measures targeting certain Canadian products. The Trump administration responded by imposing additional tariffs of up to 50% on certain Canadian imports under Section 338 of the Tariff Act of 1930. Canadian Prime Minister Mark Carney retaliated with tariffs of their own on September 8, hitting a score of US consumer goods and levying duties on many US steel products to 50% from 25%. Trump has since announced plans to ban imports of Canadian alcohol, motorcycles and some dairy products starting September 29. The tit-for-tat exchanges have transformed an economic dispute into a broader confrontation that threatens to rupture cross-border supply chains relied on by key industries like auto manufacturing. However, recent developments show Canadian Prime Minister Mark Carney recently signaled that another round of retaliation was unlikely, stating that the latest US measures against Canada would only have a 'modest' impact overall.
The trade tensions are proving unexpectedly beneficial for Canadian businesses across diverse sectors. Chapman's, Canada's largest independent ice cream manufacturer, has experienced some of its best summer sales as Canadians turn towards local products. The family-run company, which employs 1,150 people in Markdale, Ontario, has seen business benefit from the 'buy Canadian' movement. As Ashley Chapman, chief operating officer, told the Financial Times: 'Every time Trump insults Canada, Canadians buy more Canadian things.' The company has been actively sourcing ingredients and components outside the US since March 2024, with more than 70% of American ingredients and components expected to be replaced with Canadian or non-US sources by mid-2027. Ottawa-based Maker House, a retail and online gift store, has spent the past 18 months selling 300 Canadian-made products and stopped sending products to the US after tariffs increased costs. The business has seen a 'good lift' in sales, with popular items carrying the slogan 'elbows up,' Prime Minister Carney's battle cry for resisting Trump's hostility towards Canada.
The trade war is creating significant opportunities for Canadian defence and manufacturing companies. Wuxly, an Ontario-based defence textiles manufacturer, has seen its workforce grow from 50 in 2024 to 200 in 2025, with expectations to cross 350 by end of 2026. The company is benefiting from greater local procurement in Canadian defence spending under the Build–Partner–Buy framework, replacing some demand for US suppliers. Wuxly sent more than 250,000 Canadian-made goods to the EU last year and is 'tracking to surpass this number' in 2026, with 'heightened interest from European NATO nations.' The Ontario wine industry has also seen substantial growth, with Leaning Post Wines in Niagara experiencing a 'significant boost' as American alcohol was removed from government-run stores in response to Trump's March 2025 tariffs. Sales increased by 3,000 cases, representing a significant increase for a company that only produces 8,000 cases annually.
The trade war carries high stakes for both countries, particularly for Trump's Republican Party facing an uphill climb to retain control of Congress in November's midterm elections. Trump's popularity is at record lows with voters unhappy over his handling of the economy and Iran war, and the trade war risks exacerbating high prices that have become a dominant concern for the electorate. Republicans in key border states, such as Michigan which is hosting a crucial Senate race, face blowback from the tariff dispute. The spat has also seen Trump repeatedly mock Canada, threatening to make it a 51st state and deriding its prime minister as just a 'governor', while also ordering that Lake Ontario's name in US maps be changed to 'Lake America.' Despite the benefits to some Canadian businesses, others face significant challenges, with HockeyStickMan's owner Joey Walsh noting that almost half of the company's sales previously came from the US and tariffs have affected business significantly.
