Canadian Prime Minister Justin Trudeau has promised a strong response if U.S. President Donald Trump moves forward with a proposed 25 percent tariff on Canadian imports, a measure Trump indicated could take effect as early as February.
“Canada will respond, and everything is on the table,” Trudeau said during a news conference at a cabinet retreat focused on addressing economic threats posed by the new Trump administration. He characterized Canada’s potential response as “robust, rapid, and measured,” vowing a dollar-for-dollar retaliation.
Trump, who has called for stricter border controls with both Canada and Mexico to curb migration and drug trafficking, suggested the tariffs during an Oval Office briefing on the Monday following his inauguration.
“We’re thinking in terms of 25 percent on Mexico and Canada because they’re allowing vast numbers of people—Canada’s a very bad abuser also—to come in, and fentanyl to come in,” Trump said as he signed a series of executive orders.
He also instructed federal agencies to review trade issues, including deficits, unfair practices, and currency manipulation, potentially paving the way for additional tariffs.
Given that around 75 percent of Canadian exports go to the U.S., particularly in the energy and automotive sectors, the proposed tariffs could have a significant impact on Canada’s economy.
A Canadian government source told AFP that Ottawa is considering retaliatory tariffs on U.S. goods such as steel products, ceramics, glassware, and orange juice, with the first phase potentially expanding further.
Trudeau acknowledged the potential consequences for both countries, warning, “A trade war would cost the United States, but it would also have costs for Canadians.” A scenario outlined by Scotiabank suggests that such tariffs could reduce Canada’s GDP by more than five percent, significantly raise unemployment, and drive up inflation.
