Canadian Prime Minister Justin Trudeau has confirmed that the country will take “strong but reasonable” retaliatory measures against any tariffs imposed by the United States.
“I will not sugarcoat this. Our country may face a difficult time in the coming days and weeks. I know that Canadians may be worried and anxious, but I want them to know that the federal government – and in fact, all levels of government – are here to support them,” Trudeau said on January 31 in front of an advisory council on US-Canada relations.
“We will not back down until these tariffs are removed. And of course, everything is up for discussion,” he added.
Later that day, the White House announced that goods shipped from Canada and Mexico to the US would be subject to a 25% tariff starting this weekend.
Officials in Ottawa and Mexico City outlined plans to retaliate with their own tariffs, raising the possibility of a full-fledged trade war.
Canada exports 75% of its total goods and services to the US, which is its largest trading partner and closest ally. Trudeau acknowledged that trade tensions and diplomatic issues “are not something we want,” but emphasized that if Trump follows through on his threat, “we will also take action.”
The first wave of retaliatory tariffs will cause minimal damage to the US, with duties set to be imposed on $37 billion worth of US goods exported to Canada. However, if necessary, the Canadian federal government plans to increase tariffs on goods worth $75.6 billion.
After winning the election, Trump declared that upon taking office, he would “sign all the necessary documents” to impose a 25% tariff on Mexico and Canada. He stated that Mexico must stop “illegal immigrants” from crossing into the US and Canada must curb the flow of drugs like fentanyl.
In reality, Trump did not sign these documents after his inauguration. Instead, he set a deadline – February 1 – for both countries to address his concerns.
The Canadian dollar (CAD) has significantly weakened against the US dollar. At the same time, experts warn that Canada’s economy could slide into a recession.
After Trump first announced the 25% tariff on Canada, Trudeau met with Trump – then president-elect – in late November 2024. The meeting was described as “productive.” However, Trump later criticized Trudeau, even suggesting that Canada should become the 51st state of the US.
