OTTAWA: Canada’s Foreign Minister Mélanie Joly has issued a stern warning to the United States, cautioning that American consumers will bear the brunt of a “Trump tariff tax” if President-elect Donald Trump follows through on his threat to impose a 25% tariff on all Canadian goods.
Joly’s comments came after a meeting with US senators in Washington on Friday, where she emphasised Canada’s readiness to retaliate with maximum pressure on the US.
“If we need to retaliate, we will do so. And Americans will discover Trump’s tariff tax,” Joly stated, stressing that Canada is well-organized to respond effectively. However, she added that no retaliatory action would be taken until Ottawa has seen the specifics of Trump’s executive order.
Trump has previously threatened to impose sweeping tariffs on Canada, as well as Mexico and other trading partners. This move has raised uncertainty about whether it is a serious policy proposal or a bargaining tactic.
Despite the potential for increased tariffs, Trump has downplayed the risk of higher inflation, insisting that Americans will soon realize the impact.
Joly confirmed that Canada would impose an initial round of retaliatory measures, with additional rounds to follow if Trump moves forward with his tariffs.
Among the potential targets for retaliation are US exports including orange juice, toilets, and certain steel products. Canada’s trade retaliation would mirror the response it mounted during Trump’s first term in office when tariffs were levied on Canadian steel and aluminum.
The looming threat of tariffs could have significant repercussions for both nations. The US and Canada have highly integrated economies, particularly in sectors such as auto manufacturing, where parts frequently cross the border multiple times before final assembly.
A 25% tariff could disrupt these industries, negatively impacting the North American auto sector and potentially endangering American jobs.
Prime Minister Justin Trudeau also warned that such tariffs would harm the North American auto industry. “These tariffs will hurt the North American auto industry and endanger American jobs,” he said.
Joly’s visit to Washington included meetings with US Senators Lindsey Graham, James Risch, Jeanne Shaheen, John Thune, and outgoing U.S. Secretary of State Antony Blinken.
According to Joly, many US lawmakers were surprised and concerned upon learning of the potential impact on the U.S. economy, with some expressing that they did not want such tariffs.
Canada is a key trade partner for the US, with 36 U.S. states relying on Canada as their top export destination. Over $3.6 billion Canadian (US $2.7 billion) worth of goods and services cross the border every day. Joly noted that many Americans are unaware of the critical role Canada plays in their economy.
A 25% tariff could have significant economic consequences. A Canadian Chamber of Commerce analysis suggests it could shrink Canada’s GDP by 2.6% and the US GDP by 1.6%, disrupting sectors such as agriculture and energy.
Former Canadian Finance Minister Chrystia Freeland, who is now running for Prime Minister, warned that Canada’s response to tariffs would be equally forceful.
“If pushed, our response will be the single largest trade blow the US economy has ever endured,” Freeland wrote in the Toronto Star, predicting significant fallout for American industries such as Florida orange growers, Michigan dishwasher manufacturers, and Wisconsin dairy farmers.
