President Donald Trump left Canadian politicians scrambling with the announcement of a 25% tariff on all Canadian exports, with the exception of oil, which was targeted with a lower 10% rate. Upon announcing the tariffs, President Trump warned that any retaliation from the Canadian side risked a ratcheting up of trade restrictions. Nevertheless, Prime Minister Justin Trudeau unveiled a two-tiered response on Saturday: tariffs on $30 billion worth of US imports starting on Tuesday, followed by another $125 billion in 21 days, which will allow Canadian companies an opportunity to find supply chain alternatives. And though signs have already emerged on Monday indicating that President Trump is willing to back down, the episode signals a new normal in North American trade relations.