Canadian Prime Minister Justin Trudeau has pledged a firm response if U.S. President Donald Trump moves forward with his proposed 25 percent tariff on Canadian imports, a measure that Trump has indicated could be enacted as early as February.
“Canada will respond, and all options are on the table,” Trudeau stated during a press conference at a cabinet retreat focused on addressing the economic challenges posed by the new Trump administration. He described Canada’s potential reaction as “robust, rapid, and measured,” and promised a dollar-for-dollar retaliation.
Trump, who has called for stricter border controls with both Canada and Mexico to address migration and drug trafficking, proposed the tariffs during a briefing in the Oval Office on the day of his inauguration.
“We’re considering 25 percent on Mexico and Canada because they’re allowing large numbers of people to come in, and fentanyl to come in. Canada’s a major abuser as well,” Trump said while signing a series of executive orders.
Trump also instructed federal agencies to investigate trade issues, including trade deficits, unfair practices, and currency manipulation, potentially setting the stage for further duties.
With about 75 percent of Canadian exports going to the U.S., primarily in energy and automotive sectors, the tariffs could severely impact Canada’s economy.
A Canadian government source told AFP that Ottawa is considering retaliatory tariffs on U.S. goods such as steel, ceramics, glassware, and orange juice, with plans for an initial phase that could be expanded.
Trudeau acknowledged the potential consequences for both nations, warning, “A trade war would harm the United States, but there will also be costs for Canadians.” A scenario outlined by Scotiabank predicts that such tariffs could reduce Canada’s GDP by more than five percent, significantly raise unemployment, and drive up inflation.
