Experts explain how a prolonged trade war with Canada can impact the country

HARRISONBURG, Va. (WHSV) - Experts warn that a prolonged trade war with Canada can have ripple effects in both American politics and economy.

According to the U.S. Census Bureau, Canada is one of America’s top trade allies. For decades, the two countries, along with Mexico, were apart of the North America Free Trade Agreement (NAFTA), allowing for tariff-free transit of goods between the North American countries.

In President Trump’s first term, he claimed NAFTA was a “rip-off” for the United States. He then negotiated the United States-Canada-Mexico Agreement. USCMA largely worked the same as NAFTA, with some updated provisions for technological advancements and labor laws.

In Trump’s second term, tariffs have been one of the president’s largest diplomatic tools. In April 2025, Trump announced “reciprocal tariffs” on a multitude of countries for his so-called “Liberation Day.” The Supreme Court ruled months later this move was illegal, however the president persists.

Gerson Gibbs, a financial analyst and managing partner at Belite Capital, said the rise and fall of tariffs could have long-lasting impacts on the economy. He said bigger corporations are better suited to eat the costs tariffs impose on the American consumer, but local businesses aren’t in the same position. However, he said the job market could definitely experience some shifts, if these tariffs persist.

“People are having a hard time finding employment. I believe if costs at these companies increase, there can be just mass layoffs in addition to a stall on hiring,” Gibbs said. “I don’t think with the things going on and the numbers that we seen in the past couple of months that this is in the best interest of either nation.”

He said if Canada pursues trade agreements with different entities, like the European Union or the People’s Republic of China, it could leave some irreversible damage to American supply chains and economies because Canada and the United States’ economies are intertwined.

The tariffs financial impact isn’t the only repercussion this new trade war. Alain Sanders, professor emeritus of political science for St. Peter’s University, said American politics will feel the sting as well.

Many polls have Trump’s approval at the lowest it’s been during his second term, with Republicans at large also suffering because of this. Pollsters like the New York Times, have Democrats ahead of Republicans in many races. Most of these polls attribute rising costs, the war with Iran and the Epstein Files as reasons for this predicted swing.

Also, the president’s party has historically lost power in the midterm elections in the 21st century — except for George Bush in 2002.

Sanders believe the margins can continue to grow for Democrats if these tariffs aren’t resolved and a new deal isn’t reached. He said the growing gap between the top 1% and rest of Americans will speak for itself at the ballot box because people tend to vote for what’s best for their wallet.

“As long as people hear tariffs, people are not going to sit down and figure out what we are importing from Canada,” Sanders said. “All they hear are tariffs and I think the electorate has gotten sophisticated enough that they know tariffs are taxes now. ”

Currently, no trade talks have been announced between the two countries.