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As U.S. Tariffs Become Reality, Canadians Prepare for Economic Pain

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As U.S. Tariffs Become Reality, Canadians Prepare for Economic Pain

The trucks that carry about $300 million worth of auto parts each day over the bridge from Windsor, Ontario, to Detroit are still rolling as usual. But in the aftermath of President Trump’s decision to impose 25 percent tariffs on most categories of Canadian exports, the mood in Windsor, like all of Canada, was transformed.

Mr. Trump’s move has ignited a sense of economic anxiety and anger among Canadians about how they are being treated by their neighbor, ally and best customer. Most are still puzzling over Mr. Trump’s motivations and objectives for the tariffs, as well as his comments about annexing Canada as the 51st state.

And as they turned their attention to getting the potentially crippling tariffs, and a 10 percent levy on Canadian oil and gas and some minerals, lifted, politicians, business people and ordinary Canadians say that the relationship between the two countries will never return to what it once was.

Flavio Volpe, the head of a Canadian auto-parts maker trade group, said that his members could start shutting down factories in days, and that he feels betrayed by the United States.

“We’ve built two societies on the same values,” said Mr. Volpe, who is also a member of Prime Minister Justin Trudeau’s Council on Canada-U.S. Relations. “The man in the White House did a U-turn and drove right over us.”

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Mr. Trudeau and anxious business leaders throughout Canada said that their country’s focus must be on ending the tariffs as quickly as possible.

Most forecasts project that Canada’s export-dependent economy will be sent into a recession, although they differ on timing and its initial severity.

“We have a limited experience for this magnitude of a trade shock,” the Royal Bank of Canada, the country’s largest financial institution, said this week. Some Canadians reached back for comparison to the Smoot-Hawley tariffs of 1930, which raised the average U.S. import duty to a staggering 59.1 percent. Many economists believe that they worsened the Great Depression, but the two countries’ economies were far less integrated at that time.

Aside from oil and gas, Canada’s largest export sector is the auto industry. On Tuesday, Mr. Trump suggested that the only way out of tariffs for the sector is to move all of its production to the United States. Aside from abandoning a skilled work force, that would require billions of dollars in new investments.

Historically, automotive trade has been largely balanced between the United States and Canada. Parts often swirl around between Canada, the United States and Mexico, sometimes crossing borders repeatedly before winding up in vehicles in a dealer’s showroom.

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Mr. Volpe, of the Automotive Parts Manufacturers’​ Association in Canada, said that, aside from the tariffs, trade remained unchanged on Tuesday, an assessment backed up by the usual migration of trucks to the Ambassador Bridge.

The 25 percent tariffs are being paid by the importers, either other parts makers or automakers. Most contracts allow an automaker to deduct tariffs it pays when settling a parts company’s bill.

Mr. Volpe said that those deductions will make parts suppliers, which have generally have single-digit profit margins, instantly and deeply unprofitable.

He expects that most of his members can cover those losses from their cash reserves for about a week. After that, they will be forced to stop shipments.

“No one is going to burn up their cash reserve for the president of the United States,” he said.

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For more parts, automakers usually have no alternative suppliers, let alone ones in the United States. Setting up new suppliers would take time and substantial investment. The result, experts say, will be a parts shortage that rapidly cascades into assembly-line shutdowns. Thousands of workers in Canada, the United States and Mexico would be left idle.

Some industries began idling small numbers of workers before the tariffs came into effect.

Bill Slater, the president of a United Steelworkers local in Sault Ste. Marie, Ontario, said that Algoma Steel laid off about 20 of his members who are salaried employees, citing the tariffs. He said that a number of probationary hourly workers were also let go by the mill.

Truck drivers had a mixed experience. Stephen Laskowski, the president of the Ontario Trucking Association, said that some had a surge in business as companies moved to get products into the United States before the tariffs came into effect, while others were laying off drivers because customers were canceling shipments.

Canada’s forestry industry knows tariffs all too well. Special U.S. duties on softwood lumber go back decades and were a factor in Canada seeking the 1989 free trade agreement with the United States, which was later expanded to include Mexico. (Canada has repeatedly failed to get an exemption from the U.S. trade complaints system that imposes the softwood lumber tariffs.)

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But Kurt Niquidet, the president of the British Columbia Council of Forest Industries, said that adding the 25 percent tariff “really puts us into unprecedented territory.”

Lumber mills in the western province are facing a dizzying array of tariffs. This week’s 25 percent tariff is on top of a 14.4 percent tariff that the U.S. government expects to raise this summer, to more than 27 percent. Then Mr. Trump announced last weekend that he’s opened an investigation into lumber imports that could result in even more tariffs.

While the United States supplies about 70 percent of its own lumber, Mr. Niquidet, an economist, said that American forests and mills cannot replace all the lumber from Canada, nor can it be sourced from other countries.

“There will still be imports from Canada,” he said. “Prices in the U.S. will rise.” Some Canadian lumber mills, however, may not survive the trade assault, he added.

While Mr. Trudeau speculated that Mr. Trump was seeking a “total collapse of the Canadian economy, because that’ll make it easier to annex us,” Mr. Volpe said he was not sure it’s that complicated. “If it looks like he is dismantling the structure of the postwar economy, then he is,” Mr. Volpe said. “What are you going to do about it?” Some Canadians believe that their country is simply being used as part of Mr. Trump’s plan to fund substantial U.S. tax cuts with tariffs.

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Jean Simard, the president of the Aluminum Association of Canada, fought a successful battle over the 10 percent tariff on Canadian exports of the metal Mr. Trump enacted in during his first administration. Now Mr. Simard is attempting to fend off additional tariffs that Mr. Trump has promised to put on top of Tuesday’s 25 percent. He said that he believes the president is telling the world: “This is what I’m able to do to my closest allies — think about what’s awaiting you.”

Mr. Simard added: “It’s an old barbarian approach to war.”

As the tariffs were rolled out, actions against American goods quickly came into play. Government-owned liquor stores, including in Ontario, pulled U.S. beer, wine and spirits from off their shelves, and that province canceled a 100 million Canadian dollar ($69 million) contract with Elon Musk’s Starlink satellite service to provide internet in rural areas.

Some Canadians are also vowing not to travel south, a decision perhaps also informed by the decline of the Canadian dollar brought on by the tariffs.

Most winters, Lee Miller, a retired electrician from Saint John, New Brunswick, would be traveling in his motor home through sunny warm states, including Florida.

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“As soon as Trump started talking tariffs, I said, ‘Nope, not going,’” Mr. Miller said. After canceling this year’s trip, he plans not to enter the United States as long as Mr. Trump is president. That will, however, mean missed visits with friends and family who live across the border.

“This is one of those things that tears families apart,” he said.

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Oil prices rise anew after a US-Iran standoff in the Strait of Hormuz strands tankers

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Oil prices rise anew after a US-Iran standoff in the Strait of Hormuz strands tankers

NEW YORK (AP) — Oil prices rose in early trading Sunday as a standoff between Iran and the U.S. prevented tankers from using the Strait of Hormuz, the Persian Gulf waterway that is crucial to global energy supplies.

The price of U.S. crude oil increased 6.4% to $87.90 per barrel an hour after trading resumed on the Chicago Mercantile Exchange. The price of Brent crude, the international standard, climbed 5.8% to $95.64 per barrel.

The market reaction followed more than two days of lifted hopes and dashed expectations involving the strait. Crude prices plunged more than 9% Friday after Iran said it would fully reopen the strait, which it effectively controls, to commercial traffic.

Tehran reversed that decision and fired on several vessels Saturday after President Donald Trump said a U.S. Navy blockade of Iranian ports would remain in effect. On Sunday, Trump said the U.S. attacked and forcibly seized an Iranian-flagged cargo ship that allegedly tried to get around the blockade. Iran’s joint military command vowed to respond.

Sunday’s higher prices wiped out much of the declines seen Friday, signaling renewed doubts about how soon ships will again transport the vast amounts oil the world gets from the Middle East.

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The US-Israeli war against Iran, now in its eighth week, has created one of the worst global energy crises in decades. Countries in Asia and Europe that import much of their oil from the Gulf have felt the most impact of halted supplies and production cuts, although rapidly rising gasoline, diesel and jet fuel prices are affecting businesses and consumers worldwide.

Asked when he thought U.S. motorists would again see gas cost less than $3 a gallon on average, Energy Secretary Chris Wright said prices at the pump might not go down that much until next year.

“But prices have likely peaked, and they’ll start going down,” Wright told CNN’s “State of the Union” on Sunday.

The price of crude oil — the main ingredient in gasoline — has fluctated dramatically since the U.S. and Israel attacked Iran on Feb. 28, and as Iran retaliated with airstrikes on other Gulf states. Crude traded at roughly $70 a barrel before the conflict, spiked to more than $119 at times, and previously closed Friday at $82.59 for U.S. oil and $90.38 for Brent.

Industry analysts have repeatedly warned that the longer the strait is closed, the worse prices could get.

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A fragile, two-week ceasefire between the U.S. and Iran is set to expire Wednesday, while escalating tensions in the Strait of Hormuz puts the fate of new talks to end the war into question.

Even if a lasting deal to reopen the Strait of Hormuz emerges, analysts say it could take months for oil shipments to return to normal levels and for fuel prices to go down. Backed-up tanker traffic, shipowners concerned about another sudden escalation, and energy infrastructure damaged during the war are factors that could impede production and shipment volumes from returning to pre-war levels.

A gallon of regular gas cost an average of nearly $4.05 a gallon in the U.S. on Sunday, according to motor club federation AAA. That’s about 8 cents lower than a week ago, but far higher than $2.98 before the war.

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Distress call captures tanker under fire, Iran shuts Hormuz trapping thousands of sailors

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Distress call captures tanker under fire, Iran shuts Hormuz trapping thousands of sailors

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Hundreds of commercial tankers are stranded on both sides of the Strait of Hormuz after Iran shut the critical chokepoint on April 18, halting traffic and leaving crews trapped amid reports of gunfire and “traumatic experiences” on board.

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The Strait of Hormuz is considered an international waterway under international law, through which ships have the right of transit passage, according to the United Nations Convention on the Law of the Sea (UNCLOS).

Roughly one-fifth of the world’s oil supply passes through the Strait of Hormuz, making it a critical chokepoint for global energy markets, according to the U.S. Energy Information Administration.

The U.K. Maritime Trade Operations (UKMTO) said Iranian gunboats opened fire on a tanker the same day, while a projectile struck a container vessel, damaging cargo.

STARMER AND MACRON ACCUSED OF ‘PLAYING AT BEING RELEVANT’ WITH STRAIT OF HORMUZ PLAN

U.S. Central Command said Tuesday that “U.S. Navy guided-missile destroyers are among the assets executing a blockade mission impacting Iranian ports.” (CENTCOM)

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Audio released by maritime monitoring group TankerTrackers appears to capture the moment a vessel and its crew came under fire while approaching the strait, including a distress call from a crew member.

“Sepah Navy! Motor tanker Sanmar Herald! You gave me clearance to go… you are firing now. Let me turn back!” the crew member can be heard saying in the recording, according to TankerTrackers.

Iranian state media confirmed that shots were fired near vessels to force them to turn back, while the Ministry of External Affairs of the Government of India said the foreign secretary was deeply concerned.

Hapag-Lloyd, the world’s fifth-largest container shipping line, told Fox News Digital that it had activated a crisis team as its crews remain stuck on board vessels in the region.

“We have been working from Friday afternoon until today with the entire crisis team to bring the vessels out — in vain, unfortunately,” said Nils Haupt, senior director of group communications at Hapag-Lloyd AG.

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“These events can easily lead to traumatic experiences. There is also a significant risk from sea mines, which has made insuring vessels for passage through the Strait nearly impossible.”

LISA DAFTARI: HORMUZ WHIPLASH PROVES TEHRAN CAN’T HONOR ANY DEAL IT SIGNS

“The crews are well, but they are becoming increasingly impatient and frustrated. It is very unfortunate that we could not leave today,” he added. “Many ships are still stuck in the Persian Gulf.”

“Our six ships are anchored near the port of Dubai, and all crews hope for an improvement in the situation,” Haupt said.

The Islamic Revolutionary Guard Corps (IRGC) said on April 18 that the strait would remain closed until the U.S. lifts its blockade on Iranian ports, warning ships not to move from anchorage or risk being treated as “enemy” collaborators.

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Iran has previously argued that restrictions on its oil exports and shipping amount to “economic warfare,” framing actions in the Strait of Hormuz as a response to foreign pressure on its economy, according to statements from Iranian officials and state media in past incidents.

“Approaching the Strait of Hormuz will be considered cooperation with the enemy, and any violating vessel will be targeted,” the IRGC said in a statement carried by the semi-official Tasnim News Agency.

TRUMP ORDERS A BLOCKADE IN THE STRAIT OF HORMUZ AS TENSIONS WITH IRAN SOAR

Fishing boats dot the sea as cargo ships, in the background, sail through the Arabian Gulf toward the Strait of Hormuz off the United Arab Emirates, Friday, March 27, 2026. (AP Photo)

The United States imposed the blockade on Iranian ports to pressure Tehran to reopen the strait, with U.S. Central Command saying the measures are being enforced “impartially against all vessels.”

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Hapag-Lloyd said its vessels have been stuck for weeks following the initial closure after the outbreak of war with Iran on Feb. 28.

“For us, it is critical that our vessels can pass through the strait soon,” Haupt said.

“We offer all crew members unlimited data so they can video call loved ones and access entertainment. Crews are strong, but after weeks on board there is growing monotony and frustration.”

“One crew experienced a fire on board from bomb fragments. Others have seen missiles or drones near their vessels,” he added.

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“They are resilient, but each additional day makes the situation more difficult, more monotonous, and more stressful.”

President Donald Trump said Iran had agreed not to close the strait again but after the closure, Trump called the situation “blackmail” and said the U.S. would not back down.

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Schools, shops shut in northern Israel to protest the Lebanon ceasefire

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Schools, shops shut in northern Israel to protest the Lebanon ceasefire

Shops and schools shut in northern Israel as residents protested a 10-day ceasefire with Lebanon that took effect on April 16, saying “nothing was achieved”. Israeli officials say operations may continue, with forces still deployed inside southern Lebanon.

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