The annual value of a jurisdiction’s exports can vary for many reasons, including shifts in foreign demand, exchange rates, prices and supply chains.

Tariffs are another reason and one that has come to the fore over the last year.

It can, however, be hard to isolate the impact of tariffs given all the other variables in play. But, when there’s smoke in the form of a significant drop in the exports of goods that have recently seen tariffs imposed on them, it’s fairly safe to conclude the tariffs are the fire behind it.

In this vein, today’s Twenty-Four delivers on the promise we made a few weeks ago to conduct an analysis of tariff-affected export categories when the necessary data became available.

On a customs basis, the dollar value of Canada’s merchandise exports to the world fell just slightly last year by -0.3% ($2.1 billion). Exports to the U.S., however, were down by 5.2% ($30.9 billion) versus a 15.6% ($28.8 billion) rise in exports to countries other than the U.S.

As noted above, the drop in U.S. sales could be due to many factors, but the major shift in U.S. policy toward tariffs is definitely on the list.

If we zero-in on the products that faced large “sectoral” tariffs under Section 232 of the U.S. Trade Expansion Act of 1962 (the tariffs that did not get struck down by the recent U.S. Supreme Court decision), the impact of U.S. protectionism is more clear.

Steel and aluminum

The U.S. imposed tariffs on a variety of Canadian steel and aluminum products last year with the rate currently set at a punishing 50%.

Based on the product codes* listed in the U.S. tariff orders, the value of Canada’s steel and aluminum exports to the U.S. last year fell by 20.7% ($8.5 billion). That’s a lot of smoke pointing at a tariff-fed fire.

Alberta, which is not as big a producer of the affected products as Ontario and Quebec, still saw its exports in this category fall by over $293 million (19.3%) last year.

Canada’s exports of the same products to non-U.S. countries, meanwhile, improved by 21.1% ($1.1 billion).

Softwood lumber and select wood products

Canadian softwood lumber has been a target of U.S. protectionism for decades and more fuel was added to the fire last year with an additional 10% tariff added in October. This was on top of a large increase in the existing countervailing and anti-dumping duties.

Not including Canadian exports of upholstered wooden furniture, cabinets and vanities, upon which a 25% U.S. tariff was imposed in October, softwood lumber sales to the U.S. were 9.9% ($762 million) lower last year than in 2024. B.C. and Quebec bore the brunt of this, but Alberta also saw a drop of $41 million (4.0%). As with steel and aluminum exports, Canada managed to increase its sales to non-U.S. buyers by 3.8% ($62.3 million).

Autos and auto parts

Even after a number of confusing exemptions for autos and auto parts (for example, only the non-American components of a vehicle face the tariffs), U.S. tariffs are likely the key reason for a 6.3% ($5.5 billion) drop in exports to the U.S. last year. Exports to non-U.S. destinations made up some of the difference, rising by 12.4% ($976.9 million). Once again, Alberta’s exposure to these tariffs was relatively small, but not insignificant, with sales to the U.S. in this category down by $46 million (-4.0%).

The U.S. has also imposed Section 232 tariffs on copper and semiconductors with other product groups (e.g. pharmaceuticals and films) on the threatened list.

Confirming that tariffs and the uncertainty surrounding how they have been approached by the Trump administration have had a negative impact on Canada’s exports to the U.S. is, in some ways, low-hanging fruit. Of course they’ve had a negative impact—that is what they are designed to do. Still, looking at the billions of dollars involved reinforces that the stakes are high as we get deeper into the second year of Trump 2.0. As such, we will be carefully monitoring the developments on this front, including the review of the Canada-U.S.-Mexico Agreement and the currently-in-place, but not guaranteed, exemption from blanket U.S. tariffs linked to it.  

*We have tried to be as accurate as possible in applying these codes, but the multiple, complex and shifting nature of the tariff orders from the U.S. government mean that the end results may be off by small amounts.

Answer to the previous trivia question: King Kong premiered in New York City on March 2, 1933. 

Today’s trivia question: What colour does the moon appear during a total lunar eclipse?