Trump's Tariffs Could Raise Taxes By $1 Trillion – Kevin O'Leary Calls It 'The Beginning Of A Negotiation'

Shark Tank investor Kevin O'Leary isn't shy about voicing his frustration over Canada's trade situation with the U.S. He believes Prime Minister Justin Trudeau's rocky relationship with former President Donald Trump made negotiations tough – and now, Canada is feeling the consequences.

 O'Leary, who has investments on both sides of the border, thinks a different Canadian government might have handled things better.

According to a statement from the White House, Trump recently proposed a 25% tariff on imports from Canada and Mexico, along with a 10% tariff on Canadian energy products and Chinese imports. 

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These tariffs, set to take effect soon, are part of Trump's broader strategy to curb illegal immigration and reduce fentanyl in the U.S. "There is no love lost between Trudeau and [Chrystia] Freeland and Trump. They had a bad relationship in his first mandate; it's gotten worse," O'Leary said on Fox & Friends.

Canada didn't take this lightly. According to Canada's Ministry of Finance, the country is hitting back with $155 billion in retaliatory tariffs on U.S. goods. 

These tariffs could impact American businesses by disrupting auto production, raising fuel costs, and making groceries more expensive. "These tariffs will have devastating consequences for American consumers and businesses," Trudeau said, to Reuters.

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The economic fallout could be major. According to the Canadian Chamber of Commerce, a 25% tariff could shrink Canada's GDP by 2.6%, costing households an average of $1,900 per year.

 The U.S. won't be unscathed either – analysts predict a 1.6% GDP drop and an extra $1,300 in annual costs per American household. Industries like automotive, agriculture, and energy will take the biggest hits, leading to price increases.

According to The Associated Press, the auto industry could see major disruptions. North America's automotive sector, responsible for over $110 billion in annual trade, relies on parts crossing borders multiple times during production. According to TD Economics, these tariffs could increase the price of a new car in the U.S. by as much as $3,000 due to higher production costs.

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O'Leary has never been a fan of Trudeau's approach to U.S.-Canada trade. He once described a hypothetical negotiation between Trump and Trudeau as "Godzilla versus Bambi," suggesting Canada was outmatched. He also floated the idea of an economic union between the U.S. and Canada to eliminate tariffs and strengthen economic ties between the two countries.

As reported by Fox News, Danielle Smith, Alberta's Premier and leader of Canada's largest crude oil-producing province, recently met with Trump at Mar-a-Lago to discuss the energy tariff situation. According to the Canada Energy Regulator, Alberta supplied 87.4% of Canada's crude exports to the U.S. in 2023, making the province especially vulnerable to trade restrictions.

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