Prime Minister Justin Trudeau has issued a stark warning to Canadians, stating that the country could face difficult economic times if U.S. President Donald Trump follows through on his plan to impose 25% import tariffs as early as tomorrow.
“I won’t sugarcoat it. Our nation could be facing difficult times in the coming days and weeks,” Trudeau said Friday, speaking ahead of a Canada-U.S. relations council meeting in Toronto.
Despite the uncertainty surrounding the exact details of Trump’s tariff plan, Trudeau reaffirmed that Canada is ready with a strong but measured response.
The federal government has a three-round countermeasure strategy in place, which would escalate depending on the severity of the U.S. tariffs:
- Initial retaliation: Tariffs on select American-made consumer products, including Kentucky bourbon and Florida orange juice.
- Expanded trade measures: A second wave of tariffs on $37 billion worth of U.S. goods.
- Full-scale response: If necessary, additional tariffs targeting $110 billion in U.S. manufacturing and other industries.
In addition, the government is prepared to introduce a stimulus package—potentially on the scale of pandemic-era relief measures—to support affected Canadian businesses.
With $3.6 billion in goods crossing the Canada-U.S. border daily, trade experts warn that tariffs would have a damaging effect on both economies.
- For Canada: GDP could shrink by 2.6%, costing households an average of $1,900 annually.
- For the U.S.: GDP would decline by 1.6%, with American families facing a $1,300 annual financial hit.
“It’s not what we want, but if [Trump] moves forward, we will also act,” Trudeau said.
Trump has justified the tariffs by citing concerns over illegal border crossings and drug trafficking, despite Canada’s $1.3 billion investment to increase border patrols, deploy canine teams, and enhance fentanyl detection measures.
Trudeau reiterated that Canada has one of the most secure borders in the world, noting that less than 1% of fentanyl and illegal crossings into the U.S. originate from Canada.
Meanwhile, Canadian cabinet ministers are engaging in last-minute lobbying efforts in Washington, urging U.S. lawmakers to pressure Trump to reconsider. Reports suggest that Trump’s aides are exploring potential compromises to scale back tariffs on Canada and Mexico.
On Thursday, Trump doubled down on his stance, calling out “massive subsidies” and accusing Canada and Mexico of unfair trade practices.
“Mexico and Canada have never been good to us on trade,” Trump said from the Oval Office. “They’ve treated us very unfairly.”
Trump originally threatened across-the-board 25% tariffs on Canadian and Mexican imports in late November, but later revised his approach, initiating a trade policy review set to conclude by April 1. However, he recently floated February 1 as a potential deadline for new tariffs.
Trump is expected to sign new executive orders at 3 p.m. ET today, which may provide more clarity on the scope and timeline of the tariffs.
Regardless of Trump’s decision, Trudeau made it clear:
“We won’t back down. We won’t relent until tariffs are removed. And of course, everything is on the table.”
Canada now waits to see whether diplomacy can de-escalate a brewing trade war or if a new economic battle with the U.S. is inevitable.