Pennsylvania is caught in the ‘crossfire’ of U.S. trade dispute with Canada

President Donald Trump says he’s holding Canada accountable for “ripping off” the United States through unfair trade practices.

But by imposing new tariffs on Canadian goods and prompting retaliation from one of America’s largest trading partners, U.S. businesses and consumers could face higher costs, analysts said — including in key electoral battlegrounds like Pennsylvania.

Pennsylvania sold $13.4 billion in goods last year to Canada — its largest export market.

About $2 billion worth of those goods, or 16%, will be subject to higher tariffs — some as high as 50% — starting Sept. 8 after Canada this week announced new levies, according to an Inquirer analysis of trade data. Some of the state’s top exports facing new tariffs include raw aluminum, lumber, and passenger vehicles.

Canadian officials said the tariffs on hundreds of U.S. goods worth a total of $20 billion are meant to protect its workers in response to increased U.S. levies on the same amount of Canadian imports. That affects a relatively small share of trade between the two countries, but analysts said the situation is still evolving.

“There’s so many things that go back and forth, some of it multiple times. The effect and the amplification of these tariffs, we’ll definitely feel,” said Lauren Swartz, CEO of the nonprofit World Affairs Council of Philadelphia. “When we think about what that means for Pennsylvania, it’s going to be loud.”

“My sense is the rhetoric that we’re hearing, and the fact that it’s already being labeled a trade war, is that both countries are reserving the right to escalate the level, the percentage of tariffs, as well as the scope of goods that will fall under the new trade war,” she said. “So it will expand.”

The new tariffs came after talks between the U.S. and Canada over a trade deal fell apart last weekend. Trump imposed 50% tariffs on goods such as hockey sticks, national flags, and building materials.

“Canada has been ripping off the United States for decades — and President Donald J. Trump is done letting them get away with it,” the White House said on Tuesday. It said the U.S. had offered Canada “the most preferential market access of any country on Earth” but that the country chose “unreasonable demands, walk-backs, and flat-out rejection.”

Canada said the proposed terms would undermine Canadian interests.

Canadian officials said the country’s counter tariffs would protect the country’s workers and businesses. They said the levies on U.S. goods targeted sectors such as appliances, steel, dairy, and electronics.

The trade dispute could inject new uncertainty into the economy less than three months before the U.S. midterm elections decide control of Congress and statehouses around the country. Republicans are seeking to retain control of the U.S. House and Senate. Pennsylvania has several competitive House races in which Republican incumbents are seen as vulnerable.

Pennsylvania Gov. Josh Shapiro, a Democrat who is running for reelection against Republican state Treasurer Stacy Garrity, has repeatedly criticized Trump’s tariffs.

“Donald Trump’s reckless tariffs are a tax on Pennsylvanians — and Gov. Shapiro has been fighting back against them from day one,” said campaign spokesperson Manuel Bonder.

“This President has raised costs for families, screwed over our farmers, and shut down markets for businesses — all with Stacy Garrity’s 100% support,” Bonder said in a statement.

Garrity’s campaign didn’t respond to requests for comment. She has in the past said Trump’s tariffs could result in some “short-term pain” but would ultimately bring jobs to America. “It’s going to be fantastic,” she said in a clip that Shapiro’s campaign has highlighted. More recently, Garrity told reporters in July she would “do the tariffs a little bit differently.”

Canadian officials appeared to target some goods that are important in electoral battlegrounds, such as seafood in Maine, the Wall Street Journal reported.

Analysts said Pennsylvania didn’t appear to be a principal target. “But unfortunately, it’s one of the states that does a lot of goods transfer with Canada, and unfortunately, they’re hit in the crossfire,” said Kyle Peacock, a trade expert and founder of Peacock Tariff Consulting.

Peacock said that after previous rounds of tariffs, many businesses were able to absorb the costs.

But now that some products face 50% levies, that will likely change, he said. “Not a lot of industries or products have 50% margin that you can just eat,” he said. “So I think you’re going to see that this time, unfortunately, that’s going to be passed on to the consumer.”