OTTAWA—Canada should brace for U.S. tariffs to be imposed as soon as Monday, and Ottawa will be ready to respond immediately, the Liberal government says.
“If the president-elect does choose to move forward on tariffs, Canada will, of course, respond,” Prime Minister Justin Trudeau said Friday when he met in Toronto with members of a Canada-U.S. relations advisory council, and separately with the Canadian Automotive Partnership Council.
“And I will say it again, everything is on the table.”
Trudeau echoed earlier comments by Foreign Affairs Minister Mélanie Joly, who spoke from Washington and held out hope on Friday there’s still time to avoid a trade war.
Joly said the federal government estimates that the impact, if U.S. President-elect Donald Trump follows through on his threatened 25-per-cent tariff on all Canadian goods, would be massive. It would increase the cost of living and mean job losses across Canada and in key U.S. states but she refused to provide federal estimates of what the national job losses or the hit to economic activity could be.
“Definitely we have numbers that are highlighting how much this could be devastating,” Joly told reporters in a virtual news conference. “The Americans would be starting a trade war against us. And this would be the biggest trade war between Canada and the U.S. in decades.”
Joly said Ottawa is ready with a first, second and third round of counter-measures, as the Star reported on Wednesday.
She did not, however, dispute an assertion by former finance minister Chrystia Freeland, in an op-ed in the Star, that if Canada hits back with “dollar for dollar” counter-tariffs on American imports to match Trump’s 25-per-cent proposed tariffs, it could mean $150 billion in revenue for Ottawa.
Joly said the federal government would use that money to “support Canadians,” adding the Liberals dealt with the economic downturn that resulted during COVID-19 pandemic’s lockdowns.
In Washington as part of a weeks-long scramble by Canadian politicians to persuade American lawmakers close to Trump to backtrack, Joly told reporters key Republicans and Democrats are “surprised” and “very worried” by the Canadian warnings of a massive impact on American consumers and households.
“People in Washington are just settling in. And so this is all new information. And so I think we still have a case to make,” she said.
Joly chalked it up to a “level of disorganization in Washington” that is expected in a transition, but also because, she said, there is a “level of unpredictability” related to Trump and his administration, which is why Canada has to be ready to exert “maximum pressure” on the Americans if he goes ahead.
“This is a defining moment. And there is clearly a chance for us to have a say in what President Trump will do next. And meanwhile, we just need to be united because if we need to retaliate, we will do so.”
Right now, however, Joly suggested nobody, including key Republicans, really knows what Trump will do.
In French, Joly said, “I don’t think the decision has been taken, and I think the only person who knows what decision will be taken is the president himself. And so our challenge is to understand what he’s thinking and to be able to be prepared for it.
“So what we’re doing is to control what we can control, which means to be prepared.”
The Star reported Wednesday that the federal government has prepared an initial list of Canadian counter-tariffs on 10 politically sensitive items like Florida orange juice that could roll out on Monday if Trump acts, for example, with tariffs at a lower rate than 25 per cent.
Ottawa also has prepared a second step, with another list of counter-tariffs on $37.6 billion worth of American imports to this country.
The broader list of tariffs on $150 billion worth of imports would be an escalation as needed, depending on what Trump does, said a federal government official.
If the Americans go ahead with the 25-per-cent “across the board” tariffs, it would represent an “absolutely massive” surcharge on Canadian products shipped stateside, with a federal official saying a Canadian dollar-for-dollar counterpunch could require Canadian tariffs on $600 billion worth of imports from the U.S.
It’s a far cry from the 2018 Canada-U.S. tariff battle when Trump put surcharges of 10 to 25 per cent on Canada’s steel and aluminum, and Canada matched with tariffs totalling $16.6 billion on a range of American imports like Kentucky bourbon, playing cards, Harley-Davidson Motorcycles and other goods.
