Canadian tariffs to further raise prices, a top concern for voters

WASHINGTON — A developing trade war with Canada could bite Republicans ahead of the upcoming midterm elections as voters worry about rising prices and industries in states with competitive races could suffer.

Maine’s lobster industry dodged what officials had warned could be economic havoc Thursday morning when Canada reversed its decision to tax lobster imports at 25%. But states including Ohio, Pennsylvania, Kentucky, Michigan and Wisconsin could see effects if Canada follows through on retaliatory tariffs on alcohol, automobiles, dairy, home appliances, steel and other goods.

Those products are among the 629 categories Canada’s Department of Finance announced Tuesday in response to President Donald Trump’s most recent tariffs on Canadian goods that went into effect over the weekend.

“On one hand you have the issue of the U.S. import tariffs, which voters are associating with affordability, but then on the other hand you have the retaliatory Canadian tariffs, which are going to impact businesses in those states,” said Alfredo Carrillo Obregon, a trade policy analyst with the libertarian think tank Cato Institute. 

“So you could have a sort of double whammy where there’s pressure on behalf of voters for the president to recede this policy,” he said.

Trade talks have completely stalled between the U.S. and Canada, U.S. Trade Representative Jamieson Greer told Canadian Broadcasting Corporation News on Wednesday evening, a day after Canada announced retaliatory taxes to start Sept. 8 on $27.6 billion worth of American goods. 

The duties on U.S. imports will match Trump’s new 50% tariffs on hundreds of Canadian products “dollar-for-dollar,” according to Canada’s Department of Finance.

Individual businesses and importers, rather than governments, pay the tariffs on goods. Economists warn increased costs on either side of tariffs can affect investment decisions and increase consumer prices.

States Newsroom documented accounts from numerous small business owners affected by Trump’s tariff policies during his second term.

Small portion of trade volume

The Yale Budget Lab estimates that under the Trump administration’s current tariff schedule, including its latest tariffs on Canadian goods, Americans will spend an additional $1,100 annually on household costs.

The increase in annual household costs pre- and post-Trump’s newest duties on Canadian goods, which took effect Aug. 22, ranges roughly between $27 and $33, according to the Yale Budget Lab’s comparison.

Of the massive and intertwined trade relationship between the U.S. and Canada, the new tariffs account for a small fraction of all goods traded. Canada is the U.S.’s second-largest trading partner, and the two countries exchanged $879.9 billion in goods in 2025, according to the U.S. Bureau of Economic Analysis.

Major areas of trade between the two countries that are subjected to tariffs include automobiles, industrial supplies, steel, iron and aluminum.

“It’s not a huge magnitude. Both the Canadian and the American tariffs cover only about 5% of what each country exports to each other. We’re not talking about all of a sudden everything we get from Canada is going to get tariffs. It’s only a share of that. But this is the initial salvo,” Obregon said.

“If you are a company that relies on imports from Canada, and you’re sort of doing production on both sides of the border in that sense, then you are worried about where this could lead in the future,” he added.

Outsized politics

While tariffs are small in proportion to Canada and the U.S.’s entire trade portfolio, the politics are outsized.

Republican Sen. Susan Collins of Maine, who faces a tough race to keep her seat, told local reporters Wednesday she spoke with the Trump administration about protecting her state’s major lobster and seafood industry, which was spared Thursday.

Collins’ opponent, Democrat Troy Jackson, attacked the incumbent on social media Wednesday, blaming her for having “completely failed” to stop Trump’s tariffs.

The Republican candidate for Michigan’s open Senate seat, former U.S. Rep. Mike Rogers, has not commented on the new tariffs, but Democrats in Michigan are seizing the issue.

Michigan Democratic Party Chair Curtis Hertel told the Michigan Advance the tariffs will “throw Michigan’s economy into chaos.”

Rogers’ opponent, Abdul El-Sayed, on Tuesday responded to Trump’s threat on Truth Social to rename Lake Ontario to Lake America.

“Whatever you call it, you just made all the goods we buy that come across our border more expensive,” El-Sayed wrote on X. “Michigan, he’s asking us to pay for his vanity trade war with our money.”

Trump signed an executive order Thursday renaming Lake Ontario to Lake America.

During comments to reporters, Trump said Canada “has been ripping us off a long time on trade, very sadly, even the military. You know, we defend Canada for nothing.”

He added: “They don’t pay for anything, and they want to be treated like a state, but they’re not a state.”

Imran Bayoumi, an expert on U.S.-Canada relations with the Atlantic Council, said Canadians are “angry, hurt and upset” about Trump’s rhetoric toward their country’s sovereignty. 

The country, which has long received scrutiny over its defense spending, has increased the allocation in recent years, said Bayoumi, a Canadian-American.

“There’s a recognition that you can’t change your geography, and so the two are going to need to find a way to work together … on shared defense challenges, economic priorities, the Arctic, the defense of North America,” Bayoumi said. 

“The challenge now is to either find a narrow way off this path that both sides are on, which seems to be spiraling downwards, or ensure the deterioration of relations in the economic and trade sector doesn’t spill into other areas.”

Canadian Prime Minister Mark Carney enjoys approval from 76% of Canadians for his decision over the weekend to walk away from trade talks with the U.S., according to the Canadian Angus Reid Institute. But the poll found two in five Canadians also fear for their job security.

Carney has already pledged a $7.5 billion package for businesses and workers who might be affected by the tariffs.

Trump administration officials remain dug in on the tariffs and denied any major effects of the Canadian retaliatory tariffs.

“The concept that this could have any kind of meaningful effect on the United States is quite limited,” Greer told Fox News’ Laura Ingraham Wednesday. 

“And guess what? If there’s something in there that has some negative effect that is brought to the attention of President Trump, he can do what he needs to do,” he added. “I mean, this is just not going to lead to any economic Armageddon.” 

Jennifer Shutt contributed to this story.