OTTAWA—In an aggressive early move, U.S. President-elect Donald Trump threatened Monday to slap a punishing 25 per cent tariff on products from Canada and Mexico as soon as he takes office in January, prompting Prime Minister Justin Trudeau to personally call Trump to argue against the action.
It was a sharp escalation from Trump, who campaigned on a vow to levy a 10 per cent tariff on all global imports to the U.S. and tied the latest threat to “thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before.”
It led Ontario Premier Doug Ford to demand that Trudeau immediately call an emergency first ministers meeting on border security, to forestall what he said would be a “devastating” impact on jobs in this country, a fear echoed by Quebec Premier Francois Legault.
Canada has been actively courting support among allies in the U.S. to push back against the potential impact of a 10-percent price hike on all products shipped to the U.S.
On Monday, however, the former and future president ramped up the stakes, linking tougher tariffs to part of his determination to crack down on illegal immigration and drugs.
Trump, who takes office in January, wrote in a post on his Truth Social site and later X, formerly Twitter, Monday evening, that, “On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States.”
He said the new tariffs would remain in place “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!”
As part of his post, Trump threatened to charge China an additional 10 per cent tariff, “above any additional Tariffs” on all products entering the United States over concerns about drugs, including fentanyl. He has previously threatened 60 per cent tariffs on China, so it is unclear if a 70 per cent tariff is on the table.
Within two hours of Trump’s statement, Trudeau spoke to Trump, according to a senior government official, and the leaders spoke for about 10 minutes, and had a “good discussion,” the official said.
Among other things, the official said Trudeau pointed out that the number of migrants who cross from Canada to the U.S. is a tiny fraction of those who cross from Mexico, less than one per cent of the total number. The two agreed to stay in touch, according to the source, who the Star agreed not to identify because they were not authorized to publicly disclose details.
Trudeau also called Ford and Legault, the official said.
Ford had swiftly posted reaction on X to say that a 25 per cent tariff would be “devastating to workers and jobs in both Canada and the U.S.”
“The federal government needs to take the situation at our border seriously. We need a Team Canada approach and response — and we need it now. Prime Minister Trudeau must call an urgent meeting with all premiers.”
Late Monday night, Deputy Prime Minister, Chrystia Freeland and Public Safety Minister Dominic LeBlanc in a joint statement stressed several points: that Canada “places the highest priority” on border security, the “integrity of our shared border” and has beefed up efforts to disrupt “the scourge of fentanyl coming from China and other countries.”
It said Canada is America’s biggest customer, buying more from the United States than China, Japan, France, and the UK combined, and is “essential” to U.S. domestic energy supply, supplying 60 per cent of America’s crude oil imports. They left unstated the fact that a blanket 25 percent tariff would affect energy imports and hit American households and industries hard.
“My phone has been blowing up,” mainly with media calls, said Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, whose sector has expected the second term of Trump’s would bring surprises.
Major auto companies and others have been gaming out with the Canadian government what possible moves Trump would make and how to respond, but Volpe admitted Trump’s move was a surprisingly early and aggressive play.
“This is negotiating with Trump,” Volpe said, suggesting that Trump would be well aware of those in Canada — including Ford and the other premiers — who have promoted the idea that Canada should uncouple itself from Mexico, and set itself out as a bilateral, not a trilateral trading partner, and distance itself from Mexico or China.
“He’s saying, I hear what you’re saying, and I’ll call it the way I want to call it, what I want to call it, and when I want to call it.”
Unlike Trump’s first term in office, when the former president’s team was unprepared for governing and had to look for the doors and levers to do what they wanted, this time, Volpe said, he’s got experience and “He knows where they are now. So the velocity of stuff like this, tactics like this, will be will be faster.”
On the other hand, he said the Canadian government and industrial leaders also have experience and have kept up connections with others south of the border and “it’s not like we don’t have a channel here.”
Volpe projected calm, saying “We were all on the (Trump) roller-coaster in 2016 and 2020,” and “the more you go on roller-coasters, the less they affect you.”
However he admitted that “a 10 per cent tariff is untenable” and declined to say what a 25 per cent price increase on all Canadian products shipped into the U.S. would do to the automotive sector here.
But there is no understating how integrated the industry is across the continent, and Volpe said, “This is a business that works in single digit profit margins.”
His association represents about 250 automotive parts suppliers with 100,000 employees. At the same time, Canadian suppliers also have 150-plus plants in the U.S. with about 50,000 employees, and 120-plus in Mexico with 60,000 employees, he said, and American companies have about the same profile across the continent. Any sweeping tariffs such as Trump is proposing would slam those companies south of the border as well.
“Everybody would absolutely be affected,” he said, adding that “If they were somehow to halt automotive production in Canada, that’s a million vehicles are made per year by American brands that would that would disappear.
“And then the 50 per cent of the parts that go into all the vehicles that are made here come from the U.S., that’s another lost opportunity. That’s American. You can’t pull apart an omelette and isolate for the yolks and the egg whites. Once you’ve done it, you’ve done it.”
Ford, who has advocated that Canada strike its own bilateral trade deal with the U.S. and leave Mexico to fend for itself, has also underscored the close trading ties with states that are important to Trump like Michigan, New York and Ohio.
Ontario is number one trading partner to 17 states, and number two to 11 others.
In a statement posted Monday night to social media, NDP Leader Jagmeet Singh urged the Liberal government to push back hard against Trump’s tariff threat.
“Justin Trudeau, you cannot keep your head in the sand,” Singh’s post said.
“Stand up and fight like hell. Canadian jobs are on the line.”
Legault said Trump’s threat represented an “enormous risk” to Canada’s and Quebec’s economy and offered to work with Trudeau to halt the threat.
With files from Alex Ballingall
