What happened last time Trump imposed tariffs and how do they work?

U.S. President-elect Donald Trump has proposed implementing a tariff of 25 per cent on all goods imported from Canada on his first day in office.

U.S. president-elect Donald Trump on Monday proposed tariffs on all products coming into the United States from Canada and Mexico once he takes office.

It’s not the first time Canadians have had to deal with exports heading south of the border being taxed.

During his first term, Trump imposed a 20-per cent tariff on softwood lumber — part of the ongoing decades-old row over the product — followed a year later by a 25-per cent tariff on steel and 10-per cent tax on aluminum products.

Prior to taking office in 2016, Trump had blasted the North American Free Trade Agreement (NAFTA) and negotiations began in August 2017 when he was in the White House to carve out a new deal with Canada and Mexico, which remained underway by spring 2018 when Trump announced the tariffs on May 31, 2018.

Canada announced its own retaliatory tariffs on roughly $16.6 billion worth of steel, aluminum and hundreds of other products from the U.S., which also included things like maple syrup, shaving products, ketchup and even coffee.

By October 2018, a new NAFTA had been negotiated, the Canada-U.S.-Mexico-Agreement (CUSMA) — which the U.S. refers to as the USMCA — but it still took until May 2019 for an agreement to be reached to lift the tariffs on both sides.

That agreement officially took effect in July 2020 and was ratified after tariffs were lifted.

Prior to the deal, exports of steel and aluminum to the U.S. saw significant growth prior to the introduction of tariffs with steel up 22.6 per cent in the four months leading up to the imposition and aluminum rising 12.5 per cent from February to May of 2018.