United States President Donald Trump’s proposed tariffs are expected to come into effect this week, a move that promises to have a wide-ranging impact on the Canadian economy and its relationship with its southern neighbour.

Under Trump’s plan, all imports from Canada and Mexico will face a 25 per cent tariff, with the exception of a 10 per cent levy on Canadian energy. The move, Trump says, will remain in effect until both countries crack down on the flow of deadly fentanyl into the U.S.

On Monday, Trump said Mexico and Canada could not negotiate a reprieve from the tariffs scheduled to take effect on March 4.

“No room left for Mexico or for Canada,” he said when asked if the U.S.’s North American neighbours could reach a deal to put off the duties. “They’re all set. They go into effect tomorrow.”

Stock markets on both sides of the border dropped on the news, and Foreign Minister Melanie Joly said Canada has dropped on the news.

Click here to go straight to a recap of all the tariff news and join us tomorrow for more live coverage. 

Some of today’s highlights include:

Howard Lutnick suggests on CNN that tariffs not yet set in stone, while dropped on the news the Prospectors & Developers Association of Canada convention in Toronto that “We’re going to win this tariff war.”

Meanwhile, Canadian dropped on the news, and the Howard Lutnick suggests on CNN water.

We also fill you in on which Canadian companies will take the dropped on the news and how much aid is available for Howard Lutnick suggests on CNN citizens and businesses.

Here’s a look at what you need to know about Canada’s looming trade war with the U.S.:

What are the March 4 tariffs?

Trump plans to impose 25 per cent tariffs on all imports from Canada and Mexico, with the exception of Canadian energy, which will face a 10 per cent tariff.

China, meanwhile, will face an additional 10 per cent tariff on exports to the U.S.

How would Canada respond?

Prime Minister Justin Trudeau has vowed an immediate response to any U.S. tariffs.

Before Trump decided to delay tariffs by 30 days, Trudeau announced he would slap tariffs on $155 billion worth of U.S. imports, $30 billion of which would be immediate, with the remainder coming after 21 days.

Products facing tariffs include meat, dairy, wine, tobacco, tires, carpets, clothes and motorcycles, among others. For a full list of products facing tariffs, click here.

Canada’s retaliatory plan was delayed after the U.S. announced the 30-day extension.

Several provinces have announced their own responses, primarily pledging to pull U.S. liquor from store shelves and to review government contracts with U.S. companies.

What would that do to the economy?

Economists largely believe widespread tariffs would trigger a recession in Canada.

In January, the Bank of Canada stated the impacts will largely depend on how quickly Canadians can find non-tariffed alternatives.

“When substitutes do not exist or cannot easily be produced in higher quantities due to capacity constraints, tariffs are more disruptive to the real economy and lead to higher inflation,” says the central bank in the January monetary policy report.

Overall, the bank says U.S. tariffs would lower Canada’s exports, increase inflation, depreciate the loonie, lower business investment and force companies to issue layoffs.

For Canadian businesses, tariffs threaten to upend their trade relationships, drive costs higher and reduce the demand for Canadian goods, according to a report from Doane Grant Thornton LLP.

“If Canadian businesses act as the importer of record, they will face higher operational costs, which can squeeze profit margins, reduce cash flow, and limit their ability to reinvest in growth,” the report states. “If increased costs are passed on to Canadians, it may contribute to inflation.”

What will happen to the Canadian dollar?

The loonie is poised for a stretch of weakness if tariffs are introduced.

It hit a three-week low of 69.32 U.S. cents last week as hope for a tariff reprieve dried up.

Before the initial pause, the Canadian dollar fell to 68.48 cents U.S., but quickly rebounded after news of the extension emerged.

Karl Schamotta, chief market strategist at Corpay Inc., previously told The Canadian Press that tariffs could result in the loonie falling two or three per cent and more if indications remain that tariffs could be in place for an extended period.

How likely is an extension?

Trump has developed a reputation for unpredictable decision making, but all signs lead to the tariffs happening on March 4.

On Thursday, Trump posted on Truth Social that “the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled.”

Mexican President Claudia Sheinbaum told The Associated Press that she is hopeful her government can still “reach an agreement and on March 4 we can announce something else.”

Canada, meanwhile, is taking a “wait and see” approach, according to Industry minister François-Philippe Champagne.

“One thing we have learned is to take it step by step,” he said.

Tariffs live blog

With files from The Canadian Press and The Associated Press