Canada flexes economic muscle as tariff negotiations continue

Canadians are swapping their friendly auras for a fierce sense of nationalism amid U.S. President Donald Trump’s attacks on the country’s trade and sovereignty.

Trump’s mostly delayed plans for 25% tariffs on Canadian goods and his calls for the country to become an American state has spurned citizens of the U.S.’s northern neighbor and key trade partner. As a result, Canadians have rejected American imports and issued other economic punishments in an unusual show of patriotism.

“It really feels for most Canadians like we’ve been backstabbed, that the person that we trusted the most is now sort of turning on us and attacking us for no apparent reason,” said Joel Bilt, an economics professor focused on international trade at the University of Waterloo in Ontario. “That has really unified people.”

Grocery stores have encouraged visitors to “shop Canadian” with signs and special labels in aisles alerting them to which products were made domestically. A popular Facebook group focused on buying Canadian-made goods first reported on by NBC News has seen its membership more than double since early February as the on-again-off-again tariff policy played out.

More than 60% of Canadians reported buying fewer American products when shopping either in store or online, according to a survey from market research firm Leger of more than 1,500 residents conducted between March 7 and March 10. Just over seven out of 10 said they upped their purchases of goods made within the country, which has the ninth largest economy in the world.

The Liquor Control Board of Ontario went even further, barring its members from ordering American alcohol. Because the LCBO sells upwards of $1 billion in American liquor each year, the move has raised alarm for U.S.-based spirit makers like Jack Daniel’s parent Brown-Forman.

“That’s worse than a tariff,” said Lawson Whiting, chief executive of Brown-Forman, on the Kentucky-based company’s earnings call this month. “It’s literally taking your sales away.”

Ontario also said it would implement a 25% surcharge on electricity exported to Michigan, Minnesota and New York. But Ontario Premier Doug Ford said that he would temporarily halt this tax after U.S. Commerce Secretary Howard Lutnick agreed to restart negotiations.

Trump initially responded by calling to raise tariffs on Canadian steel and aluminum to 50%, but the White House told CNBC that he backed down following the conversation between Lutnick and Ford.

Still, Trump’s now-withdrawn plan for higher taxes on the metals put the United Steelworkers union — which represents about 850,000 people in the U.S., Canada and the Caribbean — on alert. USW International President David McCall said in a March 11 statement that the North American arms of the international trade organization would “fight together” against the proposed levies, which he said threatens jobs on both sides of the U.S.-Canadian border.

Even as the tariff negotiations remain in flux, travel to the U.S. is already taking a hit. Return trips by Canadians from the U.S. by vehicle tumbled around 23% in February from the same month a year ago, according to government statistics.

Government data also showed the number of Canadians flying back into the country from international locations declined in February from a year ago, signaling a pullback in tourism abroad. That comes as Air Canada announced plans to cut capacity to warm U.S. locations like Florida, Arizona and Nevada beginning this month.

Trump’s threats have prompted some cancellations to the Wildwoods in New Jersey, a popular beach destination for travelers from places like Montreal and Quebec, according to Ben Rose, marketing and public relations director at the Greater Wildwoods Tourism Authority. But he said these rescissions haven’t been as widespread as initially expected. Canadians are also weighing concerns around the exchange rate, he added.

At consumer travel shows in Toronto and Montreal, the authority received some comments from potential Canadian travelers about how Trump’s plan for levies has deterred vacationing in America. Rose said his team reminds uneasy Canadians that it has been a welcoming destination for them over several decades and provides unique value as a location within driving distance.

“Some of the pushback we’ve been getting is that: ‘You know we love Americans, and we know they love us, but we’ll see you in four years,'” Rose said. “They can’t go along with the administration.”

Canadians’ stance against Trump’s policies has spilled into culture and media as the issue captured the country’s interest.

Canadians booed the U.S. national anthem before major-league sporting games against American teams. During an appearance on Saturday Night Live this month, Canadian celebrity Mike Myers donned a shirt that reads “Canada is not for sale” alongside the country’s red-and-white flag.

Tariffs have become a focal point of Canada’s government, which saw ex-central banker Mark Carney clinch the prime minister title this month. Carney succeeds Justin Trudeau, who Trump had begun referring to as “governor” in reference to his hopes of making Canada a U.S. state.

The British Columbia government and its power operator said they would exclude Tesla products from certain green-energy rebates as of March 12, an action done to give “preference” to Canadian-made alternatives. Tesla is run by CEO Elon Musk, who has come under fire from critics for his leadership of Trump’s controversial government efficiency initiative.

Waterloo’s Bilt said Canadians’ anger is focused mainly on Trump rather than Americans at large, meaning personal relationships between citizens of each country likely wouldn’t be frayed as a result. However, he said American businesses should expect Canadians — once known as a laid-back, polite group that didn’t think twice about shopping U.S. brands or vacationing south of its border — to rebuff them until Trump backs down.

“It really has elicited the kind of response that I have never seen before,” Bilt said. “Canadians are not fundamentally nationalistic, but this really sort of hit something strong at the core of the average Canadian.”

— NBC News and CNBC’s Dan Mangan and Laya Neelakandan contributed to this report.

Disclosure: Saturday Night Live is part of NBCUniversal, which also owns CNBC.