Canadian Prime Minister Justin Trudeau has vowed a strong response if U.S. President Donald Trump moves forward with a proposed 25 percent tariff on Canadian imports, a measure Trump signaled 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 aimed at addressing economic threats posed by the new Trump administration. He described Canada’s potential reaction as “robust and rapid and measured,” promising a dollar-for-dollar retaliation.
Trump, who has called for stricter border controls with both Canada and Mexico to combat migration and drug trafficking, suggested the tariffs during an Oval Office briefing on Monday, hours after 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 — vast numbers of people to come in, and fentanyl to come in,” Trump said as he signed a series of executive orders.
He also directed federal agencies to study trade issues, including deficits, unfair practices, and currency manipulation, potentially laying the groundwork for additional duties.
With approximately 75 percent of Canadian exports going to the U.S., led by energy and auto sectors, the potential tariffs could deliver a significant blow to 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 plans for a first phase that could be expanded further.
Trudeau acknowledged the potential impact on both countries, warning, “A trade war would cost the United States, but also there will be costs for Canadians.” A scenario outlined by Scotiabank estimates that such tariffs could slash over five percent from Canada’s GDP, significantly increase unemployment, and fuel inflation.