Canada ups the ante, warns of 'biggest trade war' over Trump tariff threat

Canadian Prime Minister Justin Trudeau vowed to hit back if incoming US President Donald Trump follows through on his threat to impose punishing tariffs on Canadian imports, warning that such a move could trigger the biggest trade war between the two countries in decades.

“No one wants to see US tariffs imposed on our goods. But Canada will be ready with a national response if we need one,” Trudeau said on Friday at a meeting of the newly created Canada-US Relations Council.

The 18-member body, composed of representatives from the auto industry, unions, agriculture, and other sectors, was assembled to bolster Canada’s strategy in dealing with Trump’s policies.

“We’ve brought leaders in business, labour, and policy to the table. People from different fields, parties, and parts of the country — all on Team Canada,” added Trudeau, who recently resigned as Prime Minister.

Canada sends 75 per cent of its exports to the US, and the proposed tariffs could have a devastating economic impact on both countries. Trudeau stated that if a “worst-case scenario” trade war ensues, Canada won’t hesitate to take strong retaliatory measures.

“If push comes to shove, we will be strong and unequivocal in our defence of Canada and Canadians,” he said.

Canadian Foreign Minister Mélanie Joly echoed the stern sentiment, warning of immediate counter-tariffs. “The Americans would be starting a trade war against us. We are ready to put maximum pressure,” she said during a press conference in Washington.

“We have a series of measures that are already prepared, certainly, tariffs linked to imports,” Joly said. “If the President goes ahead on Monday, we will be ready. And we are ready for a second round and a third round.”

According to a report by Radio Canada, the Trudeau government is planning a first round of counter-tariffs that could be unveiled as soon as Trump is sworn in on Monday, January 20.

An initial round of counter-tariffs will reportedly target $37 billion in US goods, with additional measures prepared to affect up to $110 billion if necessary. The countermeasures are designed to minimise harm to the Canadian economy while demonstrating the cost of a trade war to the US.

Trump, set to return to the White House next week, has made clear his intention to impose 25% tariffs as part of a broader economic policy targeting key trading partners, including Canada, Mexico, and China. He argues the measures are necessary to tighten border security and curb entry of drugs like fentanyl into the United States.

Trudeau has dismissed the premise, maintaining that less than 1 per cent of irregular migrants and fentanyl flowing into the US come from Canada. Ottawa also recently announced a C$1.3 billion ($909 million) border security plan in response to Washington’s concerns.