Wednesday will bring another high stakes showdown between the United States and Canada.
President Donald Trump has vowed to go ahead with imposing 25 percent tariffs on Canadian imports, while Canadian energy products would be subject to a 10 percent tariff. He has dubbed April 2 “Liberation Day” for his tariffs.
It’s the latest move in a roller-coaster tit-for-tat trade spat between Trump and one of the U.S.’s major trade partners.
He proposed those tariffs in early February before quickly delaying them for a month after receiving pledges from Canadian and Mexican leaders related to drug trafficking and immigration. Those tariffs were reimposed in early March before Trump again issued another reprieve.
It’s unclear whether this time they will stay in place.
With everyone staring down “Liberation Day,” here’s a look at how these tariffs could play out for Maine.
Canada is a major trading partner
Trump suggested in February that Americans could feel “some pain” from his tariffs. Maine is poised to feel more of that pain than other states. About 70 percent of imports come from Canada, including virtually all heating oil, and 30 percent of the state’s exports are destined to the north.
Fuel prices
Mainers are likely to see the impact most directly at the gas pump and when they fill their home heating oil tanks.
Nearly all of Maine’s heating oil comes from Canada, and when Trump initially announced the tariffs, Irving Oil sent a notice to customers informing them that their bills would rise to offset the tariffs.
Unlike other parts of the country, New England has a much lower refinery capacity, meaning it relies more on Canada for refined products, while other regions source crude from Canada for processing domestically.
Patrick De Haan, head of petroleum analysis for GasBuddy, told the Bangor Daily News in early February that Mainers could see a 10- to 20-cent increase for a gallon of gas and a 20- to 30-cent increase per gallon of home heating oil.
Electricity prices
Winter may have come to a close, minimizing the potential impact from rising heating oil prices — for now. But Mainers could see higher electricity bills as summer approaches.
ISO New England, the regional grid operator, estimates that tariffs between 10 and 25 percent could increase electricity costs for New England between $66 million and $165 million.
About 9 percent of the electricity for New England comes from either Canada or New York, according to ISO New England.
But questions remain over how to collect those duties, and ISO New England likely doesn’t have “sufficient cash on hand” to cover the cost of tariffs.
“In a worst-case scenario, the ISO could be forced to seek bankruptcy protection, and the federal government could restrict or ban Canadian electricity imports into New England until the duties are paid,” Maria Gulluni, ISO New England’s vice president and general counsel, and Chris Hamlen, the ISO’s assistant general counsel for markets, wrote in a Feb. 26 letter to states.
ISO New England has petitioned the Federal Energy Regulatory Commission for guidance on the proposed tariffs.
Beyond that, Canadian leaders have raised the specter of cutting off electricity supplies. Ontario Premier Doug Ford imposed and then rolled back a 25 percent surcharge on electricity destined for the U.S. New Brunswick Premier Susan Holt hasn’t ruled out cutting off electricity exports, calling it a “last resort. That would have a direct impact on 60,000 Mainers in Aroostook County who are hooked directly into the province’s grid.
Housing prices
Maine has been experiencing a major housing crunch, fueling rising home and rent prices and putting homeownership beyond the reach of many Mainers. That situation may worsen if Trump goes ahead with those tariffs.
CoreLogic, a data and analytics firm, projects that the Trump tariffs could increase the cost for building material 4 to 6 percent over the next 12 months, while the cost for fixtures could rise 10 to 20 percent. And that’s before factoring in inflation.
The average price for building a new home in the U.S. right now is about $422,000. The proposed tariffs could add between $17,000 and $22,000 to that bill, according to CoreLogic.
That could eat into profit margins — on average 11 percent for homebuilders, according to the National Association of Home Builders, which has warned Trump’s tariffs will drive up housing costs. Already, the association has found that the prospect for tariffs is dampening builder confidence.
Altogether, that could make it increasingly difficult for Maine to reach its ambitious goal to build 84,000 new homes before the end of the decade. The state will miss that goal if it can’t increase the housing stock beyond its current rate.
Beer prices
If you like a cold one after a hard day’s work or during a weekend out on the lake, that could get more expensive.
Trump is bolstering the aluminum and steel tariffs put in place during his first term back in 2018. He’s even floated tariffs on Canadian aluminum and steel up to 50 percent. And most of Maine’s aluminum comes from Canada.
Craft brewers may be able to absorb 2 to 3 percent of those tariffs, but the remainder may be passed onto consumers or eat into their profit margins, Alex Maffucci, owner of Atlantic Brewing Company and vice president of the Maine Brewers Guild, told the BDN in mid-February.
Unlike companies like Coca-Cola, beermakers can’t switch from cans to bottles to get around the tariffs.
Lobster processing
The lobster may be a Maine icon, but the state relies heavily on Canada for processing its lobster before it goes to the market in the U.S. and globally.
Between $200 million and $400 million of lobster has crossed the border between Maine and Canada annually since 2013, according to the World Institute for Strategic Economic Research.
Canada has a more robust lobster processing sector than the U.S., and trade barriers between the U.S. and Canada could harm Maine’s most valuable fishery — and communities up and down the coast. Fishermen hauled in $464 million of lobster in 2023, accounting for nearly 76 percent of the value of all Maine marine fisheries that year.
Tourism
Regardless of whether Trump sticks with his plan to impose tariffs this time around, Maine could still see economic fallout as the tourist season approaches.
Maine is a major destination for Canadian vacationers, and the trade tensions between the two nations have fueled a rise of nationalist sentiment north of the border.
More than 750,000 Canadians visited the state in 2023. While they make up just 5 percent of all tourists to Maine, they still accounted for more than $450 million in direct spending, with an overall economic impact of more than $800 million, according to the liberal Maine Center for Economic Policy.
That supported 6,550 jobs and generated $67 million in tax revenue for the state, the Maine Center for Economic Policy wrote in February.
Before he left office in March, Prime Minister Justin Trudeau urged Canadians to boycott Maine and other popular tourist destinations.
Whether a full-on boycott will come to fruition remains to be seen. But some Canadians are clearly reconsidering their plans.
Already Maine has seen border crossings from Canada drop in response to Trump’s bellicose rhetoric. And tourist hubs have reported Canadians canceling reservations. That’s prompted the Old Orchard Beach Chamber of Commerce to plan for ways to attract more visitors from across New England to make up for any shortfall, according to CBS affiliate WGME.
