Canada says it is ready for a trade war with the United States

Three days before the inauguration of American President-elect Donald Trump, who threatens to impose tariffs on Canadian imports from the first day of his mandate, the federal government assures that it is “ready” to retaliate.

“We are not looking for a fight, but we will be there for a fight if necessary,” said Prime Minister Justin Trudeau at the opening of the meeting of the Council on Canadian-American Relations in Toronto. .

This meeting follows the meeting which took place on Wednesday in Ottawa between Mr. Trudeau and the 13 prime ministers of the Canadian provinces and territories, affirming that all retaliatory measures were now “on the table” if Mr. Trump carried out its threats to impose tariffs of 25% on all products imported from Canada.

The government still hopes to prevent the implementation of these tariffs which “would cause great harm to Canadians but also to millions of Americans,” according to Mr. Trudeau.

Several federal ministers have also traveled to Washington in recent days for discussions with Republican and Democratic officials in the hope of avoiding a “trade war” with the United States. This expression was repeated several times on Friday by Foreign Minister Mélanie Joly, following a visit to the American capital.

During this visit, Ms. Joly spoke with Republican Senators Lindsey Graham and James Risch, as well as John Thune, the number two Republican in the Senate, and Democratic Senator Jeanne Shaheen.

In particular, she informed them of the impacts that such tariffs are likely to have on the American economy and of the retaliatory measures that Canada could resort to to respond to these threats if they are carried out.

Responding to questions from journalists, she says most officials she spoke with expressed astonishment et fears in the face of these threats. Some didn’t even seem to know of the existence of these threats or levers that Canada possesses to deal with it.

Ms. Joly also affirmed that President Trump would launch a trade war if he goes ahead with his tariff threats, which would lead to the loss of many jobs across Canada and an increase in the cost of living in the country.

With these tariffs, the United States would start a trade war, the largest trade war in decades.

But she assures that Canada is ready to face it.

We will be ready to put maximum pressure because [cette] trade war […] would have devastating effects on Quebecers and Canadiansshe added.

A response in several stages

Earlier in the day, a highly placed federal source told - that, if American tariff threats go ahead, Justin Trudeau’s government would retaliate with a first round of counter-tariffs amounting to 37 billion dollars.

With this first salvo, the government would like to target products that would have a limited impact on the Canadian economy.

Ottawa is nevertheless considering a second round of counter-tariffs, this time of $110 billion. These, explains our source, would have the potential to be more damaging to the country’s economy.

The government, however, refrained from giving further details on the products which would be covered by these measures, which could come into force on Monday, the day of Donald Trump’s inauguration.

Consultation period required

A consultation period, which should last between 15 and 30 days, will however be necessary before introducing these counter-tariffs. According to our information, the government would prefer the first, shorter option of 15 days.

Justin Trudeau is due to chair a first meeting of his new Council on Canada-US Relations on Friday, which is expected to guide the government on the best way to weather the possible storm to come.

The Council includes former Alberta Premier Rachel Notley, former Canadian Ambassador to the United States David MacNaughton and former Quebec Premier Jean Charest.

With information from Fannie Olivier