U.S. tariffs on Canada struck down as illegal and here's what it means for Toronto

The U.S. Supreme Court struck down President Donald Trump's controversial tariffs on Friday, a bombshell ruling challenging the opening salvo that launched a year-long trade war between Canada and the United States.

The court voted 6-3 that the Trump administration exceeded its authority by turning to a federal emergency-powers law that allowed tariffs to be levied on nations across the globe, including Canada, in early 2025.

Canada was targeted for its alleged role in cross-border fentanyl trafficking despite a lack of data supporting the Trump administration's claims.

Toronto, as the beating heart of Canada's economy and a major tourist centre within driving distance of U.S. borders, has been hit especially hard by the trade war and the resulting increases in basic cost-of-living expenses.

Last year saw an uptick in business closures and event cancellations as people struggled to make ends meet, and Friday's ruling could be seen as a possible light at the end of the tunnel.

However, things probably aren't going to change overnight.

Giles Gherson, President and CEO of the Toronto Region Board of Trade, issued a statement on Friday morning, calling the Supreme Court ruling "a significant win for the rule of law and a repudiation by the highest court in the U.S. of highly arbitrary and damaging action."

However, Gherson says that the ruling doesn't provide much comfort for local businesses, saying, "for many businesses in the Toronto region, it feels like the latest chapter in a long saga of policy whiplash. Business leaders have been trying to 'ride out' this storm, but you cannot build a long-term investment strategy on a foundation of constant distraction and shifting rules."

"While we are happy to see these specific emergency powers curtailed, sectoral tariffs and the underlying threat of new tariffs remains a massive drain on the time and resources of our members," warns Gherson.

"It underscores the urgency for a renewed CUSMA with stable, known trade rules and secure, reciprocal Canada-U.S. trade. Until the uncertainty ends, the 'whiplash' will continue to stall our regional economy."