In justifying his tariffs on Canada and Mexico, President Donald Trump has argued that our two closest neighbors would bear the brunt of costs—despite the protestations of economists, who say the price hikes are more often felt by consumers, not the targeted countries. But beyond the likely de facto surcharges levied on every American, the impacts will be felt especially by those border states whose economies are intertwined with the countries to our north and south. For northern border states, the intensifying trade war with Canada could have staggering long-term economic effects.
In levying tariffs on Mexico and Canada—the two largest trading partners of the United States and co-members of a trade agreement that the first Trump administration negotiated and joined—the president has cited a desire to stem the cross-border flow of fentanyl and undocumented immigrants. Although some of the announced tariffs were subject to a temporary reprieve, this pause is set to expire in April. Canada has instituted reciprocal tariffs, with newly minted Canadian Prime Minister Mark Carney previously likening his country’s response to standing up to a bully.
The northern border stretches from coast to coast, meaning that different parts of the U.S. rely on Canada for different purposes. In Washington state, for example, the economies are primarily connected through tourism. In Midwestern states, the supply chains relating to the automotive industry are integrated with Canada—and thus have particularly been affected by tariffs on steel, aluminum, as well as the additional tariffs on auto imports announced this week. In the Northeast, in particular, trade of food products may be disturbed by tariffs.
The northern border states will also be affected by oil and gas tariffs, as the majority of American crude oil and electricity imports all come from Canada. In the Mountain West border state of Montana, for example, 92 percent of imports are sourced from Canada, and the majority of that is composed of oil imports.
“Montana, North Dakota, [and] Maine all have really disproportionately high shares of their trade with Canada, and the lion’s share of that is oil and gas,” said Adam Hersh, senior economist at the Economic Policy Institute. According to an Economic Policy Institute analysis of U.S. census data, 69 percent of Maine imports and 64 percent of North Dakota imports are sourced from Canada. Hersh also noted that the oil refining industry would be greatly affected if the pause on tariffs on Canadian oil and gas—set to expire in the beginning of April—is not extended.
“The cost of the refining industry in the U.S. is configured around the kind of oil that we get from Canada, and so refineries can’t really just turn on a dime and start refining oil from other places in the world that have different chemical properties. So if the tariffs devolve to hit these oil products, then this could be pretty disruptive,” said Hersh. The premier of Alberta has warned that the Canadian province will look to diversify its oil exports away from the U.S. if these penalties are instated.
Then there is the daily interaction between citizens of the two countries, given the relative ease of traversing the northern border: Canadians may travel to the U.S. simply to shop or go to restaurants. Jennifer Bettis, research and program manager at the Border Policy Research Institute at Western Washington University, noted that her region is particularly reliant on these relationships—not only are 40 percent of jobs in Washington state tied to trade, the indirect effects on cross-border travel are already harming tourism-heavy economies right on the border, such as the exclave of Point Roberts, which is not attached to the contiguous United States.
“Border states tend to feel policies at the federal level a bit more acutely, because we’re often on the margins of policymaking, and there’s a lot of unintended consequences with policy that are felt differently in border states,” said Bettis, who was the project lead on a storymap illustrating the trade relationships between different sectors of the northern border states and Canada.
For example, automakers in Michigan may be particularly affected by the newly announced 25 percent tariff on auto imports, as many auto parts cross the border multiple times before and during the building of a car. Trump’s announcement was cheered by the United Auto Workers, with union president Shaun Fain saying that it is now incumbent upon automakers to “to bring back good union jobs to the U.S.” But Glenn Stevens, executive director of MichAuto and vice president at the Detroit Regional Chamber, told Bridge Michigan that increasing production in the U.S. is “by no means a quick process” and that “these are complex decisions that will take time, long past when the tariffs’ impact will be felt within the industry.”
While automakers in Michigan may be seeing the consequences of the tariffs in the immediate term, other industries may still be waiting for the other shoe to drop. For Seth Kroeck, a farmer at Crystal Spring Farm in Brunswick, Maine, the effects of the tariffs are yet to be seen, but the uncertainty surrounding them is anathema to producers who already must contend with the unpredictability of a growing season. Crystal Spring Farm grows wild organic blueberries, among other produce. Maine is the largest producer of wild blueberries in the world, but several provinces in eastern Canada are also major producers.
Because they are grown close to the ground, wild blueberries require significant processing. Even though there has traditionally been “friendly competition” between wild blueberry producers in Maine and Canada, Kroeck said, the industry is integrated between the two countries.
“There are several processors that operate on both sides of the borders, or will take berries, say, from Canada—[which] has maybe a slightly later season than we do—to keep the processing plants in Maine running longer, which allows them to employ people for longer periods of time,” explained Kroeck.
Kroeck’s farm sells its berries in New England, meaning that he is in direct competition with Canadian growers who may sell their wild blueberries at a cheaper price point. If Canadian blueberries are suddenly more expensive, that could benefit more local producers like Crystal Spring Farm. But it wouldn’t necessarily be a net win for producers like Kroeck.
“If the Canadian blueberries were no longer brought over to the U.S. to be processed, then processors would make less profit, which means maybe they would be charging [more] of all of us who get our blueberries processed through them,” said Kroeck. “Nobody knows really what’s going to happen and how it’s all going to shake out. But we can see potential benefits, as in cutting off the Canadian flow of products, and maybe some potential downsides by having less product going back and forth across that helps float the industry as a whole.”
Wild blueberries are not the only industry in Maine that may be affected by the trade war with Canada. Sarah Alexander, the executive director of the Maine Organic Farmers and Gardeners Association, said that dairy and livestock producers in the state were particularly affected by the tariffs, as grain and feed are major imports from Canada.
“Immediately, when the tariffs went into place, several grain suppliers sent out letters right away saying that the impact of the tariffs was going to have to be passed along to the farmers that were purchasing that grain,” Alexander said. She added that tariffs on steel and aluminum were also affecting producers, with increased price quotes on greenhouses and other farming infrastructure. Moreover, local farmers have been affected by freezes on Agriculture Department funds, and in many cases are still waiting to receive the grants contracted to them by the federal government.
“There’s so much uncertainty in farming to start out with that producers are always just sort of making their best-laid plan and then seeing how things go,” Alexander said. “The tariffs are kind of in the mix of a lot of other uncertainty that is also happening at the same time, and that’s definitely adding more stress in what is already a pretty stressful part of the season where you’re just trying to get things going.”
While the impacts of a trade war with Canada may be felt more immediately across the forty-ninth parallel, they will also spread further south. Well beyond the border, many states count Canada as a major trading partner. Canadian oil is a major import for Oklahoma, for example, where many crude oil refineries are based. Canada is Texas’s second-largest trading partner behind Mexico, with the state reliant on Canadian lumber and steel for building houses; tariffs could thus drive up the cost of homes in the state. Older Canadians who travel to Florida each year to escape cold weather may opt against visiting that state. Forty-one percent of all Canadian buyers in the U.S. have property in Florida, and given increased hostilities between the two countries, some Canadian homeowners are now looking to offload those properties.
Indeed, beyond the tariffs themselves, the damage to the relationship between Americans and Canadians could have significant long-term economic effects. Trump’s dismissive attitude toward Canada, and insistence on referencing the country as the “fifty-first state,” has deeply angered Canadians. In states which rely heavily on Canadian tourists—such as Washington and Maine—increasing hostilities could discourage future travel, which in turn could weaken local economies. Bettis said that Americans were “underestimating how angry Canadians are,” and the long-term consequences such anger will have. Should Canadian tourists boycott the United States in large numbers, it will place a significant amount of wealth at risk: The U.S. Travel Association reported that Canadians made more than 20 million visits to the United States in 2024, “generating $20.5 billion in spending and supporting 140,000 American jobs.”
In many ways, the lingering effects of a trade war with Canada may last well beyond the imposition of the tariffs themselves. “The damage to that relationship is going to be much harder for us to negotiate and move past,” said Bettis. “That’s a real problem for us, because particularly in our border states, we have built relationships across the border and supply chains across the border that rely on open collaboration and friendliness. And when we close the door on that, then it leaves us in a very vulnerable position.”
