Canada woke up earlier this week to 25% tariffs imposed by the United States, triggering swift reactions from Canadian leaders. Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on $155 billion worth of American goods.

Ontario Premier Doug Ford took it a step further, removing American alcohol from LCBO shelves and cancelling the Starlink contract in Ontario. Ford warned, "If the Trump administration falls through on any more tariffs, we will immediately apply a 25% surcharge on the electricity we export. We will not hesitate to shut off their power as well."

BREAKING: Trump just posted on Truth:

“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!” pic.twitter.com/mS0EH7ZpMW

— Alexandra Lavoie (@ThevoiceAlexa) March 4, 2025

President Donald Trump responded on Truth Social, stating, “Please explain to Governor Trudeau of Canada that when he puts on a retaliatory tariff on the U.S., our reciprocal tariff will immediately increase by a like amount.”

To understand the implications of this escalating trade conflict, economist Vincent Geloso, a professor at George Mason University, weighed in. Geloso criticized the counter-tariffs as a disastrous move.

“Tariff is a tax, and it’s another tax on foreigners. It’s a tax on people in Canada who consume foreign goods,” he explained. “By doing that, you’re increasing the costs of goods and services for them, which means they have less to spend in other industries, including Canadian industries.”

Geloso highlighted that smaller nations like Canada cannot win a trade war with larger economies such as the U.S. “For Canada to match dollar for dollar what the United States is doing, we would need to do three times higher tariffs,” he noted. “The damages would not be one or two percent of GDP; it would be far closer to 10 to 15 percent.”

He dismissed claims by Canadian leaders as "blatant misinformation," adding, “There’s nothing there. When they’re saying that they can match dollar for dollar, they’re lying.” Geloso urged a return to free trade principles, arguing that protectionism leads to economic decline: “No nation protectionists its way into prosperity.”

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