WASHINGTON/OTTAWA — A landmark U.S. federal appeals court ruling has struck down former President Donald Trump’s global tariff regime, declaring that he illegally invoked emergency powers to impose sweeping duties on nearly every country in the world—including Canada.
The 7–4 decision from the U.S. Court of Appeals for the Federal Circuit ruled that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose what he called “reciprocal” tariffs overstepped presidential authority. The court emphasized that the 1977 statute was designed to restrict financial flows to hostile regimes during crises—not for setting global tariffs.
While Trump’s tariffs on steel, aluminum, autos, and copper—levied under separate trade law—remain intact, this ruling casts serious doubt on the legal foundations of many of the other levies. Trump immediately vowed to appeal to the U.S. Supreme Court, asserting that revoking the tariffs would “literally destroy the United States of America.”
The decision is set to take effect on October 14, pending further appeal.
Canada’s Position: Some Relief, Some Risk
For Canada, the impact is mixed. About 85–90% of Canadian exports to the U.S. are protected under the USMCA, meaning most Canadian goods were exempt from IEEPA-based tariffs. However, Trump had levied 35% tariffs on non-USMCA goods and 10% on Canadian energy and potash, creating trade friction even among allies.
Prime Minister Mark Carney has responded swiftly—not with retaliation, but with strategic diplomacy and domestic economic reforms.
Carney’s New Trade Doctrine: Diplomacy, Diversification, Domestic Strength
1. Retaliatory Tariffs Lifted to Reset U.S. Relations
In the days following the U.S. court decision, Carney announced that Canada would lift most retaliatory tariffs on U.S. goods—though steel, autos, and aluminum tariffs will remain to protect key sectors.
Carney’s tone signals de-escalation: “Canada remains committed to fair, rules-based trade. But we must also prepare for a world of economic nationalism.”
2. A New Continental Framework on the Table
Carney is pursuing a new “economic and security framework” with the U.S., aiming to modernize the USMCA and address unresolved disputes over metals, autos, copper, and digital trade.
Despite rounds of negotiation in Washington, a broad deal has so far eluded Canadian officials. However, trade experts believe the court ruling weakens Trump’s leverage and could accelerate talks.
3. One Canadian Economy Act: Trade Starts at Home
With global markets in flux, Carney’s domestic pivot is also gaining momentum.
His “One Canadian Economy Act” (Bill C‑5) aims to break down interprovincial trade barriers, fast-track megaprojects, and build infrastructure that reduces dependence on U.S. markets.
Key highlights:
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Reduces project approval times from 5 years to 2 years
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Invests in transportation, energy, and broadband infrastructure
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Boosts local procurement and Indigenous partnerships
4. Global Diversification: Mining, Defense, and Critical Minerals
On his latest European tour, Carney secured:
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A C$2 billion defense aid package to Ukraine
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New trade deals for critical minerals with Germany
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A major submarine procurement deal involving a German-Norwegian consortium
These partnerships signal a shift toward resource-based diplomacy, with Canadian mining, forestry, and transport sectors playing a strategic role in allied industrial supply chains.
Why It Matters for Thunder Bay and Northwestern Ontario
1. Economic Stability in Cross-Border Trade
With IEEPA tariffs ruled illegal and most Canadian goods protected under USMCA, local exporters in forestry, mining, and manufacturing can breathe a little easier. However, uncertainty remains around Trump’s steel and aluminum duties.
2. Infrastructure Surge Could Hit Local Projects
Carney’s infrastructure blitz under Bill C‑5 offers opportunities for Northern Ontario. Priority projects in transportation, energy corridors, and digital infrastructure could stimulate job creation and investment across the region.
3. Critical Minerals: New Export Avenues
With Europe and the U.S. now eager for secure, ethical sources of critical minerals, Northwestern Ontario’s mining sector is well positioned to benefit. Carney’s foreign policy is opening new export paths beyond the U.S. border.
Looking Ahead
As Trump challenges the ruling in the Supreme Court and Canada redefines its trade future, both countries are entering an era of economic repositioning. In this moment of uncertainty and opportunity, Canada appears to be playing the long game—with Mark Carney betting that diplomacy, diversification, and domestic reinvestment will secure the country’s place in a volatile world economy.
