Canadian Prime Minister Justin Trudeau said Monday that Americans “are beginning to wake up to the reality that tariffs on everything from Canada would make life a lot more expensive” and that he will retaliate if President Donald Trump imposes them.
Trump later responded by referring to Canada as a state and Trudeau as its governor.
Speaking at a Halifax Chamber of Commerce event, Trudeau added that dealing with Trump will be “a little more challenging” than in the past because his team has much clearer ideas about what they want to do immediately than they did following his first election victory in 2016.
The US president-elect has threatened to levy a 25% tax on all products entering the country from Canada and Mexico unless they stop the flow of migrants and drugs.
Mr. Trudeau stated, “I think people south of the border are beginning to wake up to the real reality that tariffs on everything from Canada would make life a lot more expensive.”
Trump won election on a platform of improving and making life more affordable for Americans.
On the weekend, Trump appeared on NBC’s “Meet the Press,” where he stated that he cannot guarantee that his promised tariffs on key U.S. foreign trade partners will not raise American consumer prices.
Mr. Trudeau asserted, “Let’s not fool ourselves; 25% tariffs on everything going to the United States would be devastating for the Canadian economy.”
“It would also result in significant hardship for Americans.” Americans import 65% of their crude oil from Canada, as well as significant amounts of electricity.
Almost all of Canada’s natural gas exports go to the United States. They depend on us for steel and aluminum.
They rely on us for a variety of agricultural imports. All of those things would become more expensive.
Trump appeared to respond to Trudeau’s comments with a social media post late Monday, mentioning Trudeau’s recent dinner at Mar-a-Lago, where some claim Trump joked about Canada becoming the 51st state.
“It was a pleasure to have dinner the other night with Governor Justin Trudeau of the Great State of Canada. I look forward to seeing the Governor again soon so that we can continue our in-depth discussions on tariffs and trade, the results of which will be truly spectacular for all! “DJT,” Trump wrote on Truth Social.
If Trump follows through on his threat to impose 25% tariffs on all imports from Mexico and Canada, the price increases that could result will contradict his campaign promise to give American families a break from inflation.
According to economists, companies would have little choice but to pass on the increased costs, resulting in dramatically higher prices for food, clothing, automobiles, alcohol, and other goods.
The Produce Distributors Association, a Washington trade group, has stated that tariffs will raise fresh fruit and vegetable prices and harm US farmers if other countries retaliate.
“We will, of course, as we did eight years ago, respond to unfair tariffs,” Mr. Trudeau said.
Trudeau said his government is still considering “the right ways” to respond, referring to when Canada imposed billions of dollars in new tariffs against the United States in 2018 in retaliation for new taxes on Canadian steel and aluminum.
The choice of many American products was based more on their political than economic significance. For example, Canada imports only $3 million of yogurt from the United States each year, the majority of which comes from a single plant in Wisconsin, the home state of then-Republican House Speaker Paul Ryan. The product faced a 10% duty.
“It was the fact that we put tariffs on bourbon, Harley-Davidsons, playing cards, Heinz ketchup, cherries, and a number of other things that were very carefully targeted because they were politically impactful to the president’s party and colleagues,” Mr. Trudeau said.
Trudeau stated that when Trump says something, he means it, but they also understand that Trump is attempting to introduce uncertainty and “a bit of chaos” into democracies.
“One of the most important things for us to do is not freak out, not to panic,” Mr. Trudeau said.
“Knowing these would be absolutely devastating means we have to take them seriously, but it does mean we have to be thoughtful and strategic and not go around making our opponents arguments for them but making our arguments in a significant and united way.”
Canadian officials have stated that it is unfair to lump Canada in with Mexico.
Last fiscal year, US customs agents seized 43 pounds of fentanyl at the Canadian border, versus 21,100 pounds at the Mexican border.
Mexican drug cartels use precursor chemicals smuggled from Asia to manufacture the majority of the fentanyl that reaches the United States, where it causes approximately 70,000 overdose deaths annually.
In terms of immigration, the US Border Patrol reported 1.53 million encounters with irregular migrants at Mexico’s southwest border between October 2023 and September 2024. That compares to 23,721 encounters at the Canadian border during the same period.
Trump has also claimed that the United States is “subsidizing Canada to the tune of over $100 billion per year.”
Kirsten Hillman, Canada’s ambassador to Washington, told the Associated Press about America’s trade deficit.
Last year, the United States and Canada experienced a $75 billion trade deficit, with energy exports accounting for one-third of Canada’s sales to the United States, despite high prices.
Canada supplies approximately 60% of the United States’ crude oil imports, as well as 85% of its electricity imports.
Canada is also the largest foreign supplier of steel, aluminum, and uranium to the United States, with 34 critical minerals and metals that the Pentagon seeks and invests in for national security.
Every day, nearly $3.6 billion in Canadian (US$2.7 billion) goods and services cross the border. 36 U.S. states consider Canada their top export destination.