The Canadian government is preparing significant retaliatory measures against U.S. exports if President-elect Donald J. Trump follows through on his threat to impose tariffs on Canadian goods. This situation could lead to a confrontation between the two countries, which are each other's largest trading partners.
Canada is compiling a list of potential measures, including tariffs on U.S. exports and restrictions on key Canadian exports to the United States, should Mr. Trump implement a 25 percent tariff on Canadian goods. However, the government has indicated it will wait to see Mr. Trump's actions before responding.
“Everything is on the table,” Prime Minister Justin Trudeau stated during a news conference in Ottawa, where he was joined by senior government officials and provincial leaders. Mr. Trudeau spent the day discussing strategies with provincial leaders to prepare for possible U.S. tariffs.
Currently, the Canadian government is operating under the assumption that Mr. Trump is serious about tariffs, which he has associated with issues of undocumented migration and drug trafficking across the U.S.-Canada border. Canada has already announced measures to enhance border security, including increased personnel and technology, and is deploying Blackhawk helicopters and drones for surveillance.
In recent weeks, Mr. Trump has suggested that his motivations for potential tariffs may extend beyond border security. He has made remarks about Canada potentially becoming a U.S. state and has threatened economic measures to annex the country. Mr. Trump argues that Canada has a trade surplus with the U.S. and that the relationship is imbalanced, needing correction.
These comments have sparked disbelief and anger among Canadian political leaders. Any tariffs imposed would violate the trade agreement between the United States, Mexico, and Canada, known as NAFTA, which was renegotiated during Mr. Trump's first presidency and is set for renewal next year.
Mr. Trudeau emphasized that Canada is prepared to respond aggressively to any economic actions taken by the incoming Trump administration. “I support the principle of a dollar-for-dollar response,” he said, indicating that Canada could impose tariffs on hundreds of billions of dollars' worth of U.S. goods.
Potential targets for Canadian tariffs include key U.S. imports such as orange juice. Mr. Trudeau acknowledged that tariffs from either government would ultimately harm both countries and their consumers.
The discussion surrounding the tariffs has created tension between the federal government in Ottawa and provincial leaders. While most premiers have rallied behind Mr. Trudeau, some have expressed differing views. Danielle Smith, the leader of Alberta, a major oil supplier to the U.S., has opposed disrupting her province's key resources, even if it could strengthen Canada's negotiating position.
Ms. Smith, who recently met with Mr. Trump, did not sign a joint statement issued by provincial leaders and Mr. Trudeau, instead releasing her own statement criticizing the federal government's proposals regarding energy supply and export tariffs.
Mr. Trudeau and other provincial leaders have maintained that tariffs on oil exports should remain a potential strategy to pressure the Trump administration. Approximately 80 percent of Canada’s oil is exported to the U.S., which relies on Canada for over half of its oil supply.
Mr. Trudeau stated that any retaliatory tariffs must be equitable across the country. He also announced plans to resign by early March, when his party will select a new leader who will assume the role of prime minister. Federal elections are expected to follow in the spring, placing a lame-duck leader in charge during the initial phase of the new Trump administration.