Canada and the U.S. are embroiled in a trade war over competing tariffs. Hang on — maybe they’re not?  

Let’s back up. It started with U.S. President Donald Trump, who signed an executive order on Feb. 1 to impose a 25% tariff on Canadian goods imported into the U.S. He also imposed a slightly reduced 10% tariff on energy products, which would include crude oil and natural gas. 

Trump, who’s also targeted Mexico and China with trade restrictions, cited trade imbalances and concerns about illegal drug trafficking across the Canada-U.S. border as his motives for implementing tariffs.  

Canadian Prime Minister Justin Trudeau hit back almost immediately, announcing that we would impose our own 25% tariffs on a $155-billion worth of goods ($30 billion in phase 1 and $125 billion in phase 2) — wine, beer, coffee, appliances, pulp and paper, etc. — imported from the U.S. 

And then came the pause. Before either set of tariffs came into effect, the leaders of the neighbouring countries managing to agree to a 30-day pause. 

Trudeau promised Trump he would increase security at the border and take steps to stop the flow of fentanyl into the U.S. from Canada (even though data indicates the amount of fentanyl smuggled across the border is actually quite small).   

Many Canadians breathed a sigh of relief at the news of a pause, but if the pause is only temporary, these tariffs could have a big effect on both the Albertan and Canadian economies. 

Let’s dig into why. 

The impact of tariffs for Alberta 

First off, let’s define what a tariff is. It’s essentially a tax. But in this scenario, the taxes are applied to goods that a country imports. The businesses that import the products into the country pay the tariffs, but there are also financial consequences for domestic consumers and the country exporting the goods. 

The effect of the tariffs on energy products is top of mind for Albertans, and the outlook for the economy isn’t particularly positive — partly because it isn’t easy to find other markets we can sell to. 

“A tariff on Canadian oil is likely to be passed onto the U.S. consumer in the form of higher prices, but also on the Canadian oil producer, who over time will face lower demand and lower prices for their output,” said Mark Parsons, ATB Chief Economist.

Energy products accounted for 82% of Alberta’s merchandise exports to the U.S. in 2023 and about 28% of Canadian exports to the U.S., according to ATB Economics. 

“For the oil and gas sector, the burden of the tariff will be shared by U.S. consumers and Canadian producers,” Parsons said.  

“Large non-energy sectors in Alberta that are highly exposed to the 25% tariff include food, chemicals, machinery, and wood products. The U.S. is the largest market for almost all of Alberta’s industries, making the tariff difficult to avoid by diverting to other markets.

“For example, 71% of Alberta’s manufactured food product exports went to U.S. buyers in 2023 and 85% of the province’s chemical products. Crop production is one of the least exposed with only 11% of this sector’s international exports going south of the border in 2023.”

Economic modelling shows the tariffs increasing job losses in Canada and causing a contraction in Canada’s gross domestic product (GDP). Canadian businesses will struggle, which is why there’s a push from politicians and consumers to actively support them. 

Spending money at local businesses across Alberta and Canada 

The emerging trade war with a country we’ve long considered a trusted ally has prompted many Canadians to consider how they can bolster more businesses right here at home. 

Politicians have gone as far as to call on Canadians to support jobs inside Canada by choosing the product made down the street or in the province next door. 

Websites like Made in Canada are taking the guesswork out of figuring out if a product is in fact Canadian and where to find it.

If you're looking for a mobile friendly experience, two developers in Edmonton came together to create the Shop Canadian app (which already has been downloaded more than 100,000 times). 

In a clothing store, knowing if a garment is Canadian will mean looking closer at a tag to see where the t-shirt was manufactured. At the grocery store, it might mean choosing the apples grown in the Okanagan over the raspberries grown in California. 

The push to buy Canadian is about trying to find some domestic replacements for the products and services you buy, but not beating yourself up if this isn’t possible — either because of your budget or the availability of what you need to purchase. 

Canada just can’t grow certain products in the winter. Or a comparable product might be available, but at a 20% markup. Maple syrup comes from Quebec, but lemons just don’t grow there. 

A brand might have been founded in Canada and is headquartered here, but the product itself might be manufactured or assembled in the U.S. or elsewhere. 

Taking an honest look at how you shop and what decisions you make to support Canadians is the goal for most Canadian shoppers. Perfection is not. It could be as simple as swapping out a mass market pop made and bottled in the U.S. for a craft soda made in Canmore.