U.S. President Donald Trump's Trade War With Canada

"All gloves are off."

"Canada is being hit hard from its historically strongest ally, and it may be politically expedient to target individuals like Musk who garner outsized influence over the U.S. administration."

James Hinton, senior fellow, Centre for International Governance Innovation

 

"Provinces would need to heavily subsidize new infrastructure to replace Starlink, which could take years to implement."

"Legally, targeting Musk's companies could be seen as overreach and Musk could sue in Canadian or U.S. courts to challenge such measures."

"[A bull's-eye on Musk's back also] risks looking like a personal vendetta rather than a rational economic response."

Andreas Schotter, professor of International business, University of Western Ontario Ivey School of Business

Starlink satellite antennas are seen at the Internationale Funkausstellung (IFA), the international trade show for consumer electronics and home appliances, on August 31, 2023. Photo by ODD ANDERSEN /Getty

As it begins to appear more and more inevitable that Donald Trump is prepared to launch another painful trade war with Canada, Mexico, China and the European Union in his determination to, in his opinion, put a stop to other countries' reliance on America's generosity, helping them to fund their own economic advance to the detriment of that of the United States, former allies and trade partners are mulling their options in an effort to stop the roller-coaster destruction of the global economy.

 

Economists everywhere agree that a substantial trade war such as what Mr. Trump is gearing up for will have the end effect of harming the world's economy, as it plays havoc in targeted nations' economies, bringing many to the point of inflationary stress, certain to impact heavily on national populations' quality of life. There is also the recognition that the United States itself will not come away free from the impact of such a draconian move as Mr. Trump contemplates.

 

In Canada, government authorities at every level are making plans and consulting with one another in a combined effort to produce a protective shield as much as possible to avoid the harm certain to arise when a commanding country whose industries are enmeshed with those of the very countries being targeted will produce harmful effects that will bring economies to their knees. In Ontario, Canada's wealthiest province, a plan is afoot to target Elon Musk in recognition of his influence with the Trump White House. 

Ontario Premier Doug Ford announced his intention to begin the process by "ripping up" the province's $100 million contract with Starlink, Elon Musk's satellite internet provide operated by aerospace company Space Exploration Technologies Corp. Signed last November, the deal  was on tap to provide internet access for Canadians resident in rural communities. "Ontario won't do business with people hellbent on destroying our economy", blustered Premier Ford, leading other premiers to scrutinize their own Starlink contracts.

 

Ontario Progressive Conservative Leader Doug Ford holds a news conference in Etobicoke on Feb. 3, 2025. Later Ford said, with the U.S. pausing tariffs, Ontario will also pause its retaliatory measures. (Evan Mitsui/CBC)

 

A situation that elicited a shrug from Mr. Musk who responded to the Premier's X warning statement with a two-word "Oh well". This type of criticism will be no surprise to a man who has aligned himself so intimately with the Trump administration, taking on the role of efficiency czar to a President whose unexpected turn against his U.S. allies has drawn surprise and resentment from his international colleagues. 

 

Emmett Macfarlane, political science professor at University of Waterloo in Ontario, approved of the move to send a powerful message to Musk. "Appeasement does little to stop a bully. We should exercise our powers to punch the bully (metaphorically) in the nose", he said in support of the Starlink cancellation threat. 

Aside from the Starlink contract, there is the issue of Musk companies in operation across Canada; Tesla alone operates 32 stores, Canada's most popular electric vehicle brand. Should a 100 percent tariff be slapped on Tesla vehicles the purchase price would be pushed from its current $56,000 tab into a sphere most electric vehicle buyers would consider hands-off. 

Doug Ford, right, says Ontario is ending its contract with Starlink, the satellite company controlled by Elon Musk, left. Photo by Getty Images/The Canadian Press

"A $100 million contract when he's worth [over] $400 billion -- this is just a flea on his side."

"If we want to truly irritate the Americans, we need to move beyond thinking about what kind of ketchup we buy and think of ways of hitting their [digital] service providers without unduly harming Canadian consumers."

Daniel Trefler, trade economist, Canada research chair in competitiveness and prosperity, Rotman School of Management at University of Toronto