A new AAF report found that the U.S. replaced Canadian imports with imports from other countries, rather than with domestic products.
Tariffs levied against Canadian imports in 2025 decreased the flow of goods across the northern border without a corresponding boost in domestic manufacturing, according to a new report.
The memo, released by Advancing American Freedom (AAF), a conservative think tank started by former Vice President Mike Pence, also finds that the decrease in imports from Canada was offset by an increase in imports from countries like Taiwan, Vietnam, and Mexico.
The study compares the year before tariffs (March 2024 to February 2025) with the latest year of trade data (July 2025 to June 2026) and concludes that manufacturing rose by a measly 0.4 percent. “Although imports from Canada fell, the United States turned to imports from other trading partners rather than spurring domestic manufacturing,” the report finds.
Total trade between the United States and Canada decreased by $50 billion between March 2024 — before the tariffs — and June 2026, a 6.5 percent decrease.
“Imports from Canada fell $34 billion and exports to Canada fell $15 billion, as U.S. goods trade with the rest of the world grew 7.4%,” the report finds.
The report comes after the trade war between the U.S. and Canada intensified in August, with the U.S. levying tariffs on roughly $27.6 billion of Canadian imports after negotiations failed, resulting in counter-tariffs targeting roughly $20 billion worth of American imports.
The president, who has embraced the moniker “tariff man”, had first attempted to levy tariffs against Canada in January 2025 — just over a week after entering office — slapping a 25 percent tariff on Canada, Mexico, and China on grounds of national security over the flow of deadly fentanyl and illegal immigration. The president paused the implementation a day before it took effect on February 4 of that year to negotiate with Ottawa.
President Trump then levied a 25 percent tariff on most Canadian goods and a 10 percent tariff on energy imports under the International Emergency Economic Powers Act (IEEPA) in March 2025. The Supreme Court struck down the president’s use of IEEPA tariff authority in February 2026.
Canada was the top destination for American exports in 2024, but was replaced by Mexico in 2025 after exports to Mexico grew by $29 billion. Total global exports grew during the surveyed time period by $273 billion, a 13.2 percent increase. Global imports grew by 0.6 percent during the same period, according to the AAF report.
The U.S.-Canada trade war has not just resulted in a shifting of the North American economic order, but has produced tremors in this year’s midterm elections, becoming an issue in key battleground states like Michigan and Maine.
“I think the administration has very much underestimated the impact on Maine families, on small manufacturers, on our agricultural products,” incumbent Republican Senator Susan Collins told Politico in September on the topic of broad-based tariffs levied against Canada.
Michigan Republican Senate nominee Mike Rogers has hesitantly embraced the tariffs as a necessary step to create good middle class jobs in sectors like automobile manufacturing. But his tune has shifted as of late.
“I will go back to work with the president on tariffs that are working and work with the president on tariffs that are not working,” Rogers told C-SPAN in September. His Democrat opponent, Abdul El-Sayed, has railed against the tariffs, calling them “ham-fisted, chaotic, and self-serving.”
The National Taxpayers Union Foundation estimates that the tariffs levied against Canadian imports cost the state an estimated $23 billion, and $5,619 per Michigan household, the largest per-household cost in the nation.
While stumping for Republicans ahead of the midterms, Vice President JD Vance has urged voters to be patient as the administration works to revive domestic manufacturing and “undo 40 years of bad policy, of globalization, of shipping American jobs overseas.”
Trump has not ruled out a trade deal with Canada, despite the tit-for-tat tariffs and a simmering personal animus with Prime Minister Mark Carney. “I think a deal will be made, but it’s going to be a fair deal,” he told reporters in late September.