US-Canada Relations Frayed in 2025: A Timeline

The alliance between the United States and Canada faced unprecedented strain throughout 2025. The year began with controversy when President Trump floated the idea of making Canada the 51st state, dismissing the border as an 'artificially drawn line' and suggesting the use of economic force rather than military action.

Relations deteriorated further as the Trump administration imposed significant tariffs on Canadian goods, initially citing the flow of fentanyl. Despite data indicating that 0.2% of US border fentanyl seizures occurred at the northern border, tariffs of 25% on general goods and 10% on energy were signed in early February. These measures triggered a chain reaction of economic and political consequences, including a 'Buy Canadian' movement, mass boycotts of American products, and retaliatory tariffs on US goods totaling approximately C$30 billion.

Political fallout was immediate. The trade conflict contributed to the collapse of the Conservative campaign led by Pierre Poilievre, who lost his seat after a stunning comeback victory by the Liberal Party under Mark Carney in April. By mid-year, tensions peaked again when Trump froze trade negotiations after Ontario aired a commercial featuring Ronald Reagan's 1987 remarks on free trade. As the year concluded, the US and Canada remained without a deal, with Canada actively seeking to diversify its trade relationships away from the United States.

The year started with a shock to diplomatic norms as President Trump publicly discussed the possibility of annexing Canada. During a press briefing at Mar-a-Lago weeks before his inauguration, he was asked about using military force to acquire the neighboring country. Trump responded, "No, economic force," adding, "Because Canada and the United States, that would really be something." He further characterized the shared border as an artificially drawn line and threatened to impose a 25% tariff.

Canadian leadership responded swiftly to the comments. Then-Prime Minister Justin Trudeau posted on X, stating, "there isn't a snowball's chance in hell that Canada would become part of the United States." Despite this rebuff, the President reiterated his suggestions in subsequent interviews.

In early February, the administration moved from rhetoric to action. Trump signed an executive order utilizing emergency economic powers to impose a 25% tariff on Canadian goods and a separate 10% tariff on energy resources. The administration alleged that the flow of fentanyl from Canada was a primary reason for these levies. However, data from US Customs and Border Protection indicated that the northern neighbor accounted for only 0.2% of US border fentanyl seizures.

The implementation of these tariffs was chaotic. They were originally set to take effect on February 4 but were paused for 30 days following a phone call between Trump and Trudeau. By March 4, the tariffs officially took effect. Just two days later, the Trump administration rolled out widespread exemptions for goods covered by the USMCA free trade agreement and cut tariffs on Canadian potash to 10% to protect the domestic agriculture sector.

Canada responded to the tariffs with a multi-pronged strategy involving government retaliation and grassroots consumer activism. By the end of March, Canada imposed 25% retaliatory tariffs on approximately C$30 billion worth of US goods. The targeted items included:

• Steel and aluminum
• Peanut butter and wine
• Home appliances
• Cosmetics

Beyond government action, a mass boycott of American products swept the country starting in March. Canadians canceled trips to the US in favor of Central American destinations and began labeling US imports with large "T" stickers in shops. Grocery stores sidelined American products, and most provinces ceased importing American liquor.

The economic impact on US businesses was palpable, particularly in the bourbon and whiskey industries located in Kentucky and Tennessee. Conversely, Canada's local economy saw potential benefits from the "Buy Canadian" movement. The boycott extended to the disposal of existing stockpiles; by the end of the year, at least four provinces planned to sell remaining US alcohol inventory and donate the proceeds to food banks. The Distilled Spirits Council reported that US spirits exports to Canada plunged by 85% in the second quarter of 2025.

The trade war became a central issue in Canada's federal election, ultimately costing the Conservative Party a likely victory. Pierre Poilievre, who had been the clear favorite in early polls, saw his campaign collapse as Trump escalated tariffs. Poilievre's "Canada First" slogan and Trump-style messaging became a liability as voters rallied behind Liberal leader Mark Carney.

Carney successfully framed the election as a referendum on defending Canada from Washington's threats. The result was a stunning comeback victory for the Liberals in April, leaving the Conservatives facing their sharpest defeat in years. Consequently, Poilievre was voted out of the parliamentary seat he had held for two decades.

Following the election, trade tensions continued to escalate. In June, President Trump announced that global tariffs on steel imports would double to 50%, a move that heavily impacted Canada, a substantial supplier of steel to the US. By the end of July, tariffs on Canadian imports not covered by previous trade agreements were increased to 35%.

Negotiations hit a breaking point in the fall over a provincial advertisement. Trump abruptly froze trade talks after Ontario aired a television commercial warning against tariffs, utilizing excerpts from a 1987 radio address by former President Ronald Reagan. The ad, promoted by Premier Doug Ford, argued that tariffs hurt workers and invite retaliation.

Trump reacted with anger, calling the commercial "fake" and accusing Canada of misrepresenting Reagan's views. In a social media post, he declared that all trade negotiations with Canada were terminated and that he would not meet with Mark Carney "for a while." Although Ford later agreed to pull the ad after it aired twice, he stated he was "not sorry" about it.

As of the end of the year, the two nations remained at an impasse. Despite initial fears of a severe economic hit, Canada reported higher-than-expected GDP growth in the third quarter. The country is now ramping up efforts to diversify its trade by looking toward Asia, with some experts suggesting that Canada "shouldn't be trying to get an agreement with the US" at this point.