Prime Minister Justin Trudeau said Tuesday that Canada will respond to the United States if President Donald Trump goes ahead with punishing tariffs on Feb. 1, pledging that the United States will respond in kind with “robust, swift” and “retaliatory” measures. very strong.”
Trudeau said Canada is willing to implement all necessary measures to try to force Trump to change course. He even proposed imposing dollar-for-dollar equivalent tariffs on American products if the United States moves forward with its promised tariff scheme; a program could result in levies on hundreds of billions of dollars of U.S. imports.
The comments come after a chaotic day for the trade relationship between Canada and the United States.
After his inauguration, Trump postponed issuing an executive order to impose tariffs on Canada, only to suggest later that day that he wants a 25 percent tariff implemented within two weeks.
He then signed a new “America First” trade policy that directs officials to study illegal migration and fentanyl flows from Canada and other countries and report by April 1 on potential trade actions to resolve what that policy calls a “emergency”.
Trudeau told reporters at a special cabinet meeting in Montebello, Que., that he was unfazed by Trump’s about-face, and said he expected a lot of “uncertainty” in dealing with this president.
He said Trump is a skilled negotiator and “will do what he can to keep his negotiating partners a little off balance.”
But Canada is also a good negotiator, Trudeau said, and is willing to inflict economic pain on the United States to get Trump to back down.
US President Donald Trump has not yet imposed tariffs on Canada, but the Liberal cabinet met to strategize and Ontario’s premier threatened to pull US alcohol from shelves.
While Canada’s priority is to avoid tariffs altogether and foster “a very positive relationship with the United States,” the country will not give in to Trump’s threats, Trudeau said.
Canada has influence, says Trudeau
Despite Trump’s rhetoric that he doesn’t need anything from Canada, Trudeau said that if Trump really wants to usher in a “golden age of America” with a booming economy, he will need Canadian natural resources such as oil, timber, steel, aluminum and critical minerals to make that happen.
That gives Canada some leverage, Trudeau said.
US President-elect Donald Trump is apparently considering three options when it comes to tariffs on Canadian goods, but federal and provincial officials say they are ready to fight back.
A 25 per cent tariff would be particularly devastating for Canada. Experts have said just a 10 percent tax would shave billions of dollars from GDP and potentially plunge the country into a painful recession that would require government stimulus to shore up the economy.
Trudeau proposes dollar-for-dollar equivalent tariffs
Officials have already drawn up a plan that will impose immediate tariffs on $37 billion worth of American goods if Trump acts against Canada, rising to $110 billion if the president does not back down.
Ottawa is also prepared to enact some tougher measures, including a possible ban on oil exports, if those earlier efforts are unsuccessful.
Trudeau said Monday his government could go even further with its retaliatory tariffs if necessary.
“Everything is on the table and I support the principle of matching tariffs dollar for dollar,” Trudeau said.
“It’s something we’re definitely going to consider if they move forward,” Trudeau said of the Americans. “We are prepared for all possible scenarios.”
Liberal leadership contenders Chrystia Freeland and Mark Carney have also backed dollar-for-dollar tariffs to punish Trump if he attacks Canada.
“Dollar-for-dollar retaliatory tariffs by Canada should be a given and should target where their impacts are felt most strongly in the United States. Every dollar raised by Canadian tariffs should be used to help support Canadian workers in this fight,” Carney said in a statement.
Warning to Canadians
Trudeau warned that consumers will bear costs if Canada enters a trade war to prevent Trump from torpedoing the economy. Retaliatory tariffs could raise the price of many things Canadians buy in the US.
“If Canada needs to respond with tariffs equivalent to imports from the United States, those would be paid by Canadian consumers,” he said.
Trudeau said there will be government support to help workers and businesses weather the storm, and urged people to buy Canadian products whenever possible to avoid the worst of the potential cost increases.
Trump threatens to apply these tariffs because he claims that Canada is sending drugs and migrants to the United States.
Ottawa has shown a willingness to engage with Trump on the issue and has already announced a $1.3 billion border package that will result in more personnel and technology to better monitor the 49th parallel.
Canada also has data on its side.
Figures from U.S. Customs and Border Protection show that the agency seized just 19.5 kilograms of fentanyl at the northern border last year, compared to a whopping 9,570 kilograms at the southwest border.
When it comes to illegal immigrants, there is also a huge disparity between Canada and Mexico.
Alberta seeks diplomatic solution
Still, Alberta Premier Danielle Smith said Ottawa should take Trump’s concerns seriously and try to find some kind of diplomatic solution to this trade conflict, and focus on implementing more border measures to appease the new president.
Speaking to reporters from Washington, where he attended inauguration events over the past two days, Smith said he doesn’t believe retaliatory tariffs will work against Trump. Canada should focus on creating a win-win scenario that involves giving the president more of what he wants to get him to back down, he said.
“We have to be realistic. We are an economy that is a tenth the size of the American one. We depend much more on the trade relationship with them than they do on us, so trying to achieve a tit-for-tat “A tariff war without addressing the underlying problems will not end well for Canada,” he said.
That leaves Smith out of touch with conservative leader Pierre Poilievre, who said Tuesday that he supports some unspecified retaliatory tariffs against Trump for his “unjustified 25 percent tariffs.”
Poilievre urged Trudeau to reconvene Parliament immediately so that MPs and senators can pass laws to strengthen the border and “agree on trade retaliation and prepare a plan to rescue Canada’s weak economy.”
Under Canadian trade law, the government can impose retaliatory tariffs on the United States without parliamentary approval.
Still, Poilievre said parliamentarians should have a say.
“Open Parliament. Take back control. Put Canada first,” he said.
