Tobi Lutke Comments On Response To Trump’s Decision

The trade war between the United States and Canada is now in full swing, and it didn’t have to be this way. At least, that’s what one of Canada’s most prominent business leaders is saying.

Tobi Lutke, billionaire co-founder and CEO of Shopify, didn’t hold back in his critique of outgoing Prime Minister Justin Trudeau, arguing that the Canadian government should have acted sooner to avoid crippling tariffs imposed by President Donald Trump.

“Canada thrives when it works with America together. Win by helping America win,” Lutke posted on X. “Trump believes that Canada has not held its side of the bargain. These are things that every Canadian wants its government to do, too.”

And he’s right.

Last week, Trump officially slapped a 25% tariff on Canadian goods, citing Ottawa’s failure to assist in curbing fentanyl trafficking and illegal immigration. His position is straightforward: if Canada wants the benefits of being America’s closest trading partner, it needs to be a real partner in return.

The response from Trudeau? A retaliatory 25% tariff on $107 billion worth of U.S. goods—an attempt to pressure red states that supply Canada with essential goods. Trudeau and his Liberal government seem to believe that economic blackmail will somehow force Trump to reconsider. But as Lutke points out, this is a losing strategy.

“Hitting back will not lead to anything good. America will shrug it off. Canada will decline,” Lutke warned.

And the numbers back him up.

Canada may have been America’s biggest trading partner in 2023, with over $900 billion in total trade, but the relationship is far from equal. Roughly 75% of Canadian exports go to the U.S., while only 13% of U.S. exports go to Canada. That means America holds far more leverage in this trade battle than Trudeau seems willing to admit.

Even more concerning for Canada? The tariff package includes a lower 10% tariff rate on energy resources—a direct shot at Canada’s massive oil exports to the U.S. Last year alone, Canadian crude accounted for 24% of U.S. refinery production. If American refineries begin sourcing oil from elsewhere, Canada’s energy sector is in serious trouble.

This trade war wasn’t inevitable. Trudeau saw it coming and even flew to Mar-a-Lago back in November to try and talk Trump out of it. That visit didn’t just fail—it made Trudeau look weak in the eyes of both Americans and his own citizens. And now, with Canada’s economy at risk, he’s resorting to reactionary policies that will likely do more harm than good.

Canada is already struggling under the weight of a failing economy, high taxes, and restrictive regulations that chase away businesses. Now, Trudeau’s decisions could push Canada into a full-blown economic crisis—one that might extend long after he leaves office in March.

While Trudeau is scrambling, Trump is making his position clear.

“We pay hundreds of Billions of Dollars to SUBSIDIZE Canada. Why? There is no reason. We don’t need anything they have,” Trump wrote on Truth Social.

And then came the line that sent Canadian politicians into a panic:

“Canada should become our Cherished 51st State. Much lower taxes, and far better military protection…AND NO TARIFFS.”

Now, obviously, Canada isn’t going to become a U.S. state. But Trump’s comment highlights a stark truth: Canada’s economy is deeply dependent on America, and Trudeau is in no position to pick a fight he cannot win.

Canada’s next federal election is set for October, and these tariffs could become the defining issue of the race. Trudeau is widely unpopular, and if his successor can’t secure a better deal with the U.S., the economic fallout could wipe out the Liberal Party for a generation.

Meanwhile, in the U.S., Trump has nothing to lose. Even if Trudeau’s retaliation causes temporary disruptions, the American economy is far more resilient. Trump understands that short-term pain is often necessary for long-term strength. And with a Republican-controlled House and Senate, he has no reason to back down.