Trump Raises Canada Tariffs to 35% Amid Trade Dispute

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Construction Costs Set to Skyrocket in the US, Experts Warn

Breaking News: The construction industry in the United States is bracing for a significant and potentially unprecedented surge in building costs. Industry observers and analysts are issuing stark warnings,predicting that construction costs will go “bonkers” in the coming months.

By Archyde Staff Writer

February 29, 2024

The economic landscape is shifting, and the ripple effects are being felt keenly within the construction sector. A confluence of factors is aligning to push US construction costs to new, potentially unmanageable heights.

did You Know? The demand for construction materials has been amplified by global recovery efforts and infrastructure investments,creating intense competition for limited resources.

Experts point to a perfect storm of rising material expenses, escalating labor demands, and ongoing supply

What are the potential long-term consequences of a 35% tariff on Canadian goods for the US housing market?

escalating Trade tensions: A Deep Dive

On July 31st,2025,former President Donald Trump announced a meaningful escalation in trade tensions with Canada,imposing a 35% tariff on imports of canadian goods. This move, framed as a response to what the Trump administration terms “unfair trade practices” and “persistent barriers” to American businesses, has sent shockwaves through both economies. The tariffs are being implemented under Section 301 of the trade Act of 1974, the same legal framework used during the previous administration’s trade disputes. Key sectors impacted include lumber, steel, aluminum, and agricultural products.

The Immediate Impact on Key Industries

The 35% tariff is already having a demonstrable effect. Here’s a breakdown of the initial impact across crucial sectors:

Lumber: Canadian lumber exports, vital for the US housing market, face a considerable price increase. This is expected to contribute to rising construction costs and potentially slow down housing development.

Steel & Aluminum: US manufacturers reliant on Canadian steel and aluminum are bracing for higher input costs. This could lead to reduced competitiveness and potential job losses in downstream industries.

Agriculture: Canadian agricultural exports, including wheat, canola, and beef, are facing significant barriers to entry into the US market. This impacts Canadian farmers and potentially raises food prices for American consumers.

Automotive: The automotive industry, with its highly integrated North American supply chains, is particularly vulnerable. Tariffs on auto parts sourced from Canada could disrupt production and increase vehicle prices.

Understanding the Root Causes of the Dispute

The current trade dispute stems from a complex web of grievances.While the Trump administration cites unfair trade practices, the underlying issues are multifaceted:

1. Dairy Market access: A long-standing point of contention revolves around Canada’s dairy supply management system, which the US argues restricts access for American dairy farmers.
2. softwood Lumber: Disputes over softwood lumber have persisted for decades, with the US accusing Canada of unfairly subsidizing its lumber industry.
3. Digital Services Tax: Canada’s implementation of a digital services tax targeting large tech companies, including US-based firms, has further fueled tensions.
4. Energy Policy: Differing approaches to energy policy, particularly regarding pipeline projects like the Keystone XL, have contributed to the strained relationship.

canada’s Response and Potential Retaliation

The Canadian goverment has strongly condemned the tariffs, calling them “protectionist” and “unjustified.” Prime Minister justin Trudeau has vowed to retaliate with equivalent tariffs on US goods. Potential targets for Canadian retaliation include:

Agricultural Products: Targeting US agricultural exports, such as corn, soybeans, and poultry.

Manufactured Goods: Imposing tariffs on US-made manufactured goods, including automobiles and industrial machinery.

Consumer Goods: Retaliatory tariffs on a range of US consumer products.

Canada is also exploring options through the World Trade Institution (WTO) to challenge the legality of the US tariffs.

Historical Context: Trade Wars and Tariffs

This isn’t the first time the US and Canada have engaged in trade disputes.The history of US-canada trade relations is marked by periods of cooperation and conflict.

The Auto Pact (1965): A landmark agreement that eliminated tariffs on auto trade between the two countries, fostering a highly integrated automotive industry.

Softwood Lumber Disputes (Ongoing): Decades of disputes over softwood lumber, with repeated rounds of litigation and negotiations.

NAFTA/USMCA: The evolution of the North American Free Trade Agreement (NAFTA) into the United States-Mexico-Canada Agreement (USMCA) aimed to modernize trade rules but didn’t resolve all underlying tensions.

Trump Administration Tariffs (2018-2020): The previous administration imposed tariffs on steel and aluminum imports from Canada, leading to retaliatory measures and a period of heightened trade uncertainty.

Impact on the Global Economy & Supply Chains

The US-Canada trade dispute has broader implications for the global economy. Disrupted supply chains, increased trade costs, and heightened uncertainty can negatively impact economic growth.

Supply Chain Disruptions: the tariffs exacerbate existing supply chain vulnerabilities, particularly in sectors reliant on cross-border trade.

Increased Inflation: Higher tariffs translate to increased costs for businesses and consumers, contributing to inflationary pressures.

Global Trade Uncertainty: The dispute adds to a climate of global trade uncertainty, discouraging investment and hindering economic growth.

What Businesses Need to Do Now: Risk Mitigation Strategies

Businesses operating in both the US and Canada need to proactively assess the risks and implement mitigation strategies:

1. Supply Chain Diversification: Explore alternative sourcing options to reduce reliance on Canadian suppliers.

2.