Assessing the Multifaceted Consequences of Trump's Tariffs on Canadian Exports: Implications for the American Auto Industry, Energy Security, Agricultural Sector, and Beyond

Abstract

The imposition of tariffs by the Trump administration has had significant economic implications, with findings suggesting that nearly 90% of the tariffs' economic burden fell on US firms and consumers. The average tariff rate increased from 2.6% in 2017 to 13% in 2025, leading to a trade deficit of $461.8 billion in 2021. Studies show that the tariff incidence was shared, with 37% paid by US consumers, 51% by US businesses, and 9% by foreign exporters. The tariffs have led to increased costs for US consumers and businesses, with prices rising by 9.4% due to a 10% tariff. The trade deficit widened by 2.1% in 2025 compared to 2024, despite tariff revenues hitting $236 billion. The impact on GDP growth was negative, with a 0.6-1.0% decline in US GDP. The findings suggest that tariffs have not effectively reduced the US trade deficit, but rather shifted the burden to domestic consumers and businesses. The implications of these tariffs include higher prices, reduced economic growth, and increased uncertainty for global markets.