You’ve probably heard the headlines from a few years back. The trade wars, the "national security" threats over aluminum, and the heated back-and-forth between Ottawa and D.C. It felt like a sudden, jarring break in a polite friendship. But if you think canada tariffs on us goods before trump didn't exist, or that the border was a perfectly frictionless vacuum for decades, you’re in for a surprise.
The truth is way messier.
For nearly thirty years leading up to 2017, Canada and the U.S. operated under a "free trade" banner—first with the 1989 Canada-U.S. Free Trade Agreement (CUSFTA) and then the big one, NAFTA, in 1994. But "free trade" is often a bit of a misnomer. It’s more like "mostly free trade with some very specific, very angry exceptions."
The Fortress Around the Fridge: Supply Management
If you ever tried to ship a pallet of American milk or a truckload of chicken breasts into Ontario in, say, 2012, you would have hit a brick wall. This is the big one. It’s called Supply Management.
Canada has used this system since the early 1970s to keep its farmers in business. Basically, they control how much milk, cheese, eggs, and poultry are produced domestically so prices stay stable. To make that work, they have to keep foreign stuff out.
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How? Huge tariffs.
We aren't talking about a 5% or 10% tax. We are talking about "prohibitive" levels. Before the recent renegotiations, if a U.S. producer went over a very tiny quota, the canada tariffs on us goods for dairy could skyrocket to 200% or even 300%.
Honestly, it’s one of the most successful protectionist schemes in modern history. The U.S. hated it. They complained about it at the WTO for years. But because Canada viewed it as a matter of "food sovereignty," it remained a permanent fixture of the trade landscape long before any 2016 election cycle.
The Never-Ending "Lumber Wars"
Then there’s the wood. Softwood lumber, to be specific.
If you want to see trade lawyers get a headache, ask them about the "Lumber Wars." This dispute has been running since the early 80s and has gone through five distinct phases (cleverly named Lumber I through Lumber V).
The U.S. side always claimed that Canada’s provincial governments "subsidized" their timber by charging low "stumpage fees" to harvest trees on public land. U.S. timber, mostly on private land, couldn't compete with the price.
Whenever the peace broke down—which it did in 2001 and again in 2015—the U.S. would slap "countervailing duties" (basically a tariff) on Canadian wood. Canada would then retaliate. In the years leading up to the Trump era, specifically after the 2006 Softwood Lumber Agreement expired in 2015, we were right back in the thick of it.
Why the 2006 Deal Mattered
- It actually brought a decade of relative peace.
- The U.S. returned about $4 billion in collected duties to Canada.
- It used a "sliding scale" where Canada would tax its own exports if prices got too low, just to appease the Americans.
When that deal died in October 2015, the "free trade" veneer started to crack well before the political landscape shifted in Washington.
The Stealth Tariffs: Rules of Origin and "Dumping"
Most people think tariffs are just taxes at the border. But often, canada tariffs on us goods before trump took the form of "Anti-Dumping" duties.
If a Canadian company felt an American firm was selling steel or drywall in Canada for less than it cost to make it (just to kill the competition), they’d complain to the Canada Border Services Agency (CBSA).
If the CBSA agreed? Boom. A duty was slapped on that specific product.
This happened all the time. Drywall from the U.S. West into Western Canada was a massive flashpoint in 2016. At one point, tariffs on U.S. gypsum board (drywall) jumped by over 200%, nearly stalling home construction in places like Vancouver and Calgary.
The Automotive Exception (and why it was weird)
The car industry was different. Since the 1965 Auto Pact, parts have moved back and forth across the Detroit-Windsor border like they were in the same factory.
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A single spark plug might cross the border six or seven times before the car is actually finished. Because of this integration, neither side really dared to mess with auto tariffs for decades. It was the "Gold Standard" of what trade could look like.
But even here, there were "Rules of Origin." If a car was "Made in America" but used too many parts from overseas, it wouldn't qualify for the 0% NAFTA rate. It would get hit with the Most-Favoured-Nation (MFN) rate, which usually hovered around 6.1% for vehicles entering Canada.
What This Means for Business Today
Understanding that the border was never "wide open" is crucial. If you're looking at the history of North American trade, you have to realize that the "pre-Trump" era wasn't a utopia; it was a highly regulated, litigious environment where specific industries were constantly under fire.
Actionable Insights for Navigating North American Trade:
- Watch the "Expiry" Dates: Trade peace in North America is usually temporary. The new USMCA (CUSMA in Canada) has a "sunset clause." Mark the review years on your calendar; that's when the "Lumber Wars" style rhetoric usually restarts.
- Audit Your Supply Chain for "Origin": Don't assume a product is tariff-free just because you bought it from a guy in Buffalo. If the components inside it came from a third country, you might still be liable for MFN tariffs.
- Monitor the CBSA "Dumping" List: If you're an importer, check the Canadian "Special Import Measures Act" (SIMA) list regularly. You don't want to find out your key supply has a 150% anti-dumping duty attached to it after the truck has already left the warehouse.
The border has always had its "toll booths." Trump just made them more visible. By studying the long-standing friction points like dairy and lumber, you can predict where the next trade skirmish is going to happen—and protect your bottom line before the headlines start screaming again.