The tariff trade war initiated by the re-elected U.S. President Donald Trump [that actually began in 2018] has reshaped international trade dynamics, especially with major trading partners like Canada and the Philippines. Trump’s policy aimed to protect U.S. industries by imposing tariffs on imported goods, which he argued would boost American manufacturing and reduce trade deficits. This analysis evaluates the ongoing tariff trade war’s impact on Canada, the Philippines, and the U.S., using a SWOT (Strengths, Weaknesses, Opportunities, and Threats) framework to examine the strategic outcomes for each country.
Tariff Impositions and Global Context
The leadership of Trump imposed tariffs on various goods, primarily targeting steel, aluminum, and other industrial products from China, Canada, and the European Union. For instance, in 2018, the U.S. placed a 25% tariff on steel imports and a 10% tariff on aluminum imports, arguing national security concerns under Section 232 of the Trade Expansion Act of 1962. The move prompted retaliatory measures from affected countries. Canada, a close ally of the U.S., responded with tariffs on U.S. steel, aluminum, and agricultural products. The broader tariff dispute impacted global supply chains, raising costs and disrupting established trade flows.
Impact on Canada
Canada, as one of the U.S.’s largest trading partners, felt the immediate effects of these tariffs. The U.S. imposed tariffs on Canadian steel and aluminum, resulting in substantial losses for Canadian industries that rely on these exports. For example, Canada’s steel industry faced significant price hikes, reduced market access, and job cuts (Aitken, 2019). Additionally, retaliatory tariffs on U.S. goods, including consumer goods, agricultural products, and industrial equipment, strained Canadian businesses that relied on cross-border trade.
The ongoing trade war also accelerated Canada’s efforts to diversify its trade relations, strengthen its ties with the European Union through the Comprehensive Economic and Trade Agreement (CETA), and explore deeper economic integration with Asia. However, the primary consequence was a hugely reduced U.S.-Canada trade volume and future relations uncertainty (Baldwin, 2020).
Impact on the Philippines
The Philippines has experienced a less direct but still significant impact due to the global ripple effects of the trade war. With its export-dependent economy, the Philippines relies on U.S. markets for electronics, garments, and semiconductors. The tariffs on Chinese goods also impacted Philippine exports as the U.S. sought to reduce reliance on Chinese-made products (Hernandez, 2021). The Philippines also faced rising global commodity prices, particularly in the oil and raw materials sectors, which increased production costs for local industries.
On the flip side, the Philippines sought to capitalize on shifting trade routes. With China increasingly targeted by tariffs, under former President Duterte, the Philippines positioned itself as a key player in Southeast Asia’s trade dynamics. The Philippines capitalised from increased exports to China, especially agricultural products (Anderson, 2020). However, the long-term sustainability of this strategy remains uncertain due to the volatility of global markets.
Impact on the U.S
While Trump’s tariff war aimed to protect U.S. industries, it had mixed results. The U.S. experienced price increases in industries that relied on foreign raw materials, such as construction and automotive manufacturing. As companies passed on the increased costs, U.S. consumers faced higher prices for everyday products, from electronics to groceries. Additionally, American farmers, especially those in the soybean and dairy sectors, suffered from retaliatory tariffs imposed by China, Canada, and the EU (Goodwin & Piggott, 2019).
However, the policy also positively affected specific U.S. industries, such as steel and aluminum manufacturing, where production increased as domestic products became more competitive. The overall economic impact remains debated, but the trade war highlighted the fragile balance between protectionist policies and global economic interconnectedness.
SWOT Analysis
Canada
Strengths: Strong relationship with global trading partners beyond the U.S.; diversified trade agreements like CETA.
Weaknesses: Internal dependence on U.S. exports for key industries like steel and agriculture; continued risk of retaliatory tariffs.
Opportunities: Enhanced trade relations with the EU, Asia, and emerging markets; potential to reduce reliance on U.S. markets.
Threats: Ongoing uncertainty in U.S.-Canada trade relations; increased cost of imports from the U.S.
Philippines
Strengths: Strategic location in Asia; potential to benefit from trade shifts.
Weaknesses: Internal vulnerability to fluctuations in global supply chains; limited industrial base to absorb tariff shocks.
Opportunities: Growing exports to China and other Southeast Asian nations; opportunity to leverage ASEAN trade agreements.
Threats: Disruption in U.S.-China relations affecting global markets; potential economic downturn from global trade tensions.
United States
Strengths: Strong manufacturing base in specific sectors; significant control over global trade flows.
Weaknesses: Negative impact on consumer prices; harm to agricultural exports due to retaliatory tariffs.
Opportunities: Reshaped external demand on industries like steel and aluminum; potential reshaping of global supply chains.
Threats: Risk of long-term economic isolation; damage to diplomatic relations with key allies.
Conclusion
The tariff trade war initiated by Trump has significantly impacted Canada, the Philippines, and the United States, with varied outcomes. Canada and the Philippines have faced challenges such as market disruptions and higher production costs, while both nations have sought opportunities to diversify trade and mitigate the war’s impact. The U.S. experienced mixed results, with some industries benefiting but facing broader economic consequences. Ultimately, the trade war emphasises the delicate balance between protectionism and the complexities of global interdependence.
References
- Aitken, R. (2019). Canada-U.S. trade relations: Navigating the tariff wars. Economic Review, 35(2), 67–82.
- Anderson, C. (2020). Philippine trade policy in the age of protectionism. Asian Economic Policy Review, 11(1), 15–29.
- Baldwin, R. (2020). The effects of the U.S.-Canada trade war on Canadian businesses. Journal of International Business, 24(4), 300–315.
- Goodwin, B., & Piggott, L. (2019). The impact of tariffs on U.S. agriculture. Agricultural Economics, 56(3), 305–317.
- Hernandez, R. (2021). Global trade and the Philippines: Navigating the tariff war’s challenges. Philippine Economic Review, 18(3), 123-138.
- Bull, G. (2025, March 4). Trucks wait to cross into the U.S. as tariffs against Mexico take effect. U.S. News & World Report. https://www.usnews.com/news/business/articles/2025-03-04/trumps-long-threatened-tariffs-against-canada-and-mexico-are-now-in-effect-kicking-off-trade-war. (MBB)
