Continental divide

In remote upstate New York, the tiny village of Clayton hugs the bank of the St. Lawrence River—directly across the water from Canada. The river is the boundary between the two countries. And it’s also the main artery bringing vital tourist dollars to the region’s economy. Every spring and summer, visitors flock to the Thousand Islands Region for its boating, fishing, and scenery.

Historically, many of these visitors have been Canadians. Susan Lyth runs a gourmet popcorn shop in Clayton and estimates Canadians make up about 30% of her customers. Lyth said her community has always gotten along well with its northern neighbors. She describes Canadians as the “top hat” to rural New York’s “hillbilly coveralls.”

But this year, Americans are feeling a bit of a chill from across the river as U.S. President Donald Trump deploys tariffs against trading partners like Canada. One recent Leger survey found over a quarter of Canadian respondents now view the United States as an “enemy,” and many Canadians say they won’t be buying U.S. products or coming south for business or vacation this year. Already, government data showed a 30% drop-off in Canadians road-tripping to the United States this March.

And that means many small businesses along the border will likely soon be feeling the pinch. “We’re bracing for it here,” Lyth said. “Fingers crossed, hopefully everybody on up and down the river survives.”

TARIFFS—TAXES ON IMPORTED foreign goods—have long been part of Trump’s agenda. During his first term, Trump imposed tariffs on imported aluminum and steel in a bid to bring back U.S. manufacturing jobs. And on the campaign trail last year, he repeatedly called tariff the “most beautiful word in the dictionary.” On his first day back in office, Trump announced a 25% tariff against Mexican and Canadian goods over border control issues. Although Trump later reversed course on this measure, he left in place other duties on Canadian goods like steel, aluminum, and automobiles.

On April 2, after weeks of buildup, the U.S. president unveiled a sweeping so-called “Liberation Day” tariff regime against America’s trading partners—a move he promised would put the American Dream back on the table and hit back at “foreign cheaters” who have “ripped off” American industry for decades. The plan inaugurated a 10% universal tariff rate with additional taxes on a country-by-country basis. In theory, these tariffs were supposed to be “reciprocal,” a way of “doing unto others as they are doing to us,” Cato Institute scholar Colin Grabow told me.

But, in practice, Grabow said there was “very little connection” between the level of trade barriers other countries imposed on the United States and the tax bracket they wound up in. That’s because the plan factored trade deficits into its calculation instead of focusing solely on existing tariff rates—taking a trade imbalance as “a sign of unfair trade.”

After Trump’s tariff announcement, the stock market nose-dived—suffering its worst day since the COVID-19 pandemic in 2020. Although the market soared again after Trump declared a 90-day pause on reciprocal measures for all countries except China, Grabow said the tariff tug-of-war has created a rift with many U.S. allies: “The fact we slapped big tariffs on China—that’s not a surprise. But we slapped tariffs on everybody.”

Shelves empty of American products at a supermarket in Vancouver in March. VCG via Getty Images

American Enterprise Institute senior fellow Desmond Lachman said that’s a turn of events that’s been “hugely damaging to the United States’ image in the world.” He said the Trump administration has taken a “my way or the highway” approach that’s left America’s allies feeling they can’t “really trust the United States anymore.”

Over 500 miles north of Washington, D.C., communities on both sides of the U.S.-Canadian border are feeling the aftershocks of the United States’ rapidly evolving trade policy. On the Canadian side of the water, the country’s distinctive maple leaf flag graces many porches and lawns as the country’s April 28 ­election approaches—as if in polite, Canadian protest to Trump’s repeated offer to make the country the 51st U.S. state.

Martin Buser, a gift shopkeeper in Cornwall, Canada, has started carrying baseball caps with the slogan “Canada is not for sale” by popular request. Others, like Catherine Leaker, a gas station attendant in Mallorytown, say lots of people are opting to buy Canadian-made products right now. “As soon as they see something that’s American, they put it back,” she said.

But not everyone is opposed to Trump’s tariff plan. Heritage Foundation Executive Vice President Derrick Morgan said the Trump administration can use these tariffs as leverage to eliminate trade barriers with other countries and move toward freer trade in the long run: “I think the sweet spot is to use tariffs to lower tariff and non-tariff barriers abroad—at least with other free countries.”

China is the exception. Morgan noted a growing consensus among conservatives, and even some liberals, that the United States needs to take strong steps to make China play fair in the global market. The Chinese government currently bans some U.S. companies from its borders and steals hundreds of billions of dollars’ worth of U.S. intellectual property.

China is now the only country still facing elevated tariff measures—shouldering a 145% tariff rate as the trade war between the two countries continues to escalate.

Meanwhile, with the other reciprocal tariffs paused, the Trump administration is now on the clock to negotiate new trade deals with dozens of countries. And that’s a staggering prospect. The current United States–Mexico–Canada Agreement (USMCA) took about two years to ­hammer out during Trump’s first term.

Still, Morgan is optimistic the country can strike some beneficial deals to “open markets to American exports.” He said if Congress springs into action to pair these measures with tax cuts and regulatory reforms, then he has “great confidence the economy will boom.”

IN THE MEANTIME, border town residents grapple with the fallout of the cooling relations between Canada and the United States. For some, like Michelle Eastty of International Falls, Minn., the consequences are deeply personal. Eastty is general manager at Heartland Christian Broadcasters Inc., and she’s married to a Canadian who’s still working his way legally through the U.S. immigration process. Recently, one of Eastty’s co-workers—who had a house and ­family on the U.S. side of the border—had his visa revoked six months early, seemingly “out of the blue.”

Eastty’s worried her husband might finally get a visa only to have the same thing happen to him. “We’re both nervous about what happens if he comes back across the border and they decide to revoke what we have spent years trying to get into place,” she said. For the time being, at least, she and her husband can’t live together—Eastty has to commute back and forth to visit him in Canada.

Eastty is a Trump supporter and agrees with most of his policies. But she said this is different. “People in leadership can say, ‘It’s not personal, it’s business’… but it is personal to those of us that are living it.” For people in communities like hers, Canadians are their family members, friends, and customers. “Overall, people here still want to be good neighbors,” Eastty said. “And it’s just hard when politics gets involved then and divides.”