Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

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

John Okey Onoh PhD, Effe-Nnamdi Ann Chinenye, Veronica Adaku Ihezukwu PhD

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.

Keywords

Trump tariffsCanadian ExportsAmerican Auto IndustryEnergy Security and Agricultural Sector

References

Adebayo, O. (2019). _SMEs and economic growth in Nigeria_. Journal of Business and Management, 21(2), 1-12. Amiti, M., & Weinstein, D. E. (2019). The impact of tariffs on US firms. National Bureau of Economic Research. Baldwin, R. E. (2018). The great convergence: Information technology and the new globalization. Harvard University Press. Becker, J., & Shanker, D. (2020). The US auto industry's vulnerability to Trump's trade war. Bloomberg. Bhagwati, J. (2002). Free trade today. Princeton University Press. Bielecki, J. (2002). Energy security. Oxford University Press. Bown, C. P. (2020). US-China trade war tariffs: An up-to-date chart. Peterson Institute for International Economics. EIA. (2021). US Energy Information Administration: Canada. Fitzgerald, D. (2018). The effects of tariffs on trade and welfare. Journal of International Economics, 115, 103-115. Grossman, G. M., & Helpman, E. (2018). Trade wars and trade talks. Journal of Political Economy, 126(2), 537-578. Helpman, E. (2019). Globalization and inequality. Harvard University Press. Hufbauer, G. C., & Jung, E. (2020). US-China trade disputes: The impact on the US economy. Peterson Institute for International Economics. Helper, S., & Krueger, T. (2017). The changing nature of the US auto industry. Brookings Institution. Hughes, D. (2020). Canada's energy exports to the US: A review of the data. Canadian Energy Research Institute. IMF. (2021). International Monetary Fund: World Economic Outlook. Irwin, D. A. (2019). Clashing over commerce: A history of US trade policy. University of Chicago Press. Gardner, B. L. (1992). Agricultural policies in the developed countries. Cambridge University Press. Granger, C. W. J. (1988). Some recent developments in a concept of causality. _Journal of Econometrics_, 39(1-2), 199-211. Johnson, H. G. (1951-52). The optimum tariff and the retaliation. Review of Economic Studies, 19(2), 121-133. Johnson, D. G. (1975). The world food situation. American Journal of Agricultural Economics, 57(2), 177-187. Khan, M., & Sattar, R. (2019). _Impact of macroeconomic variables on SMEs_. Journal of Economics and Finance, 43(3), 567-582. Klier, T., & Rubenstein, J. M. (2017). The changing nature of the North American auto industry. Brookings Institution. Krugman, P. (2018). Pop internationalism. MIT Press. Melvin, J. R. (2018). The effects of tariffs on employment and wages. Journal of International Economics, 115, 116-128. Ohlin, B. (1933). Interregional and international trade. Harvard University Press. Ricardo, D. (1817). On the principles of political economy and taxation. Rodrik, D. (2018). Straight talk on trade. Princeton University Press. Stiglitz, J. E., & Weiss, A. (1981). Credit rationing in markets with imperfect information. _American Economic Review, 71(3), 393-410. Sumner, D. A. (2018). The economics of US agricultural trade policy. Wiley. Vernon, R. (1966). International investment and international trade in the product cycle. Quarterly Journal of Economics, 80(2), 190-207. World Bank. (2021). World Bank: Global Economic Prospects. Yergin, D. (2011). The quest: Energy, security, and the remaking of the modern world. Penguin. Zahniser, S., et al. (2020). US agricultural exports to Canada: Trends and prospects. USDA Economic Research Service.

More Articles from WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH