OTTAWA—Chrystia Freeland, the former deputy prime minister who helped draft Canada’s response to Donald Trump’s tariff threat, says “hope is not a plan” as the federal Liberal government insists there is still time to avoid the U.S. president’s 25 per cent whack on all Canadian products.
Trump again promised Saturday to slap tariffs on imports from this country, cranking up his anti-Canada rhetoric, inflating trade deficit numbers as a so-called $250-billion “subsidy,” and saying that Canada “doesn’t really exist” without the U.S.
“Without our subsidy, Canada, you know, doesn’t exist really,” he said aboard Air Force One en route to Miami. “Canada is totally reliant on us, therefore they should be a state.”
“We lose $250 billion a year on Canada. I could stop that in one day. And if I stopped that, Canada wouldn’t exist as a state, you know, as a — as a country,” he said. “And we’re not even talking about tariffs yet, but that’ll happen on Feb. 1,” Trump added.
On Monday, Foreign Affairs Minister Mélanie Joly and Public Safety Minister David McGuinty said Canada will continue to make the case that tariffs will lead to higher prices in the U.S., hurt American consumers and households and that Canadian exports are key to American economic prosperity. They argue Canada has improved border security to address Trump’s purported concerns about migrant and fentanyl flows.
Joly said Liberal cabinet ministers and departments are reaching out to enlist allies in Britain, France, Europe, and Mexico (which have faced varying threats of 10 per cent tariffs, and 25 per cent on Mexico) and will continue personal and private diplomatic efforts to try to reverse Trump’s tariff plans.
“We believe that we can do so,” said Joly. “How can we do so? We will continue to engage with our different American counterparts,” she said ahead of her travel to Washington Wednesday to meet Trump’s secretary of state, Marco Rubio.
Trump is “using tariffs as a way to put pressure on countries,” said Joly. But, she added, “we have also different levers.”
The Star has reported the federal government is contemplating, in addition to using counter-tariffs, the use of nontariff measures, including directing defence procurement spending somewhere other than the United States, putting export tariffs on, or restricting the supply of Canadian energy shipments to the U.S., but it is holding its cards close. Joly insisted Ottawa does not want to negotiate in public.
McGuinty said the Canadian strategy involves “political outreach, official outreach and operational outreach.” The two ministers expect to meet Trump’s “border czar” Tom Homan this week, and McGuinty expects to meet with Trump’s newly-confirmed Secretary for Homeland Security Kristi Noem. Defence Minister Bill Blair is also expected to travel to Washington this week.
Freeland, however, said the time has passed for trying to make nice with Trump.
One of two leading contenders in a field of six for the Liberal leadership and the prime minister’s job, Freeland is positioning herself as the toughest opponent to Trump, and released a policy paper Monday urging Ottawa to take a more publicly aggressive stand.
Freeland called on the Trudeau government to publish a detailed, dollar-for-dollar retaliation list of American imports worth up to $200 billion — more than the $150 billion that Trudeau has told premiers he has at the ready, in order to exert maximum pressure on Trump.
Freeland said the list should be “precisely and painfully targeted” at American products and companies that would be felt by businesses, and politically powerful decision-makers south of the board.
Other measures she proposed include a “Buy Canadian” strategy: halting federal government purchases of any goods from U.S. companies except in cases involving national security, barring U.S. companies from bidding on federal procurement contracts (excluding defence), and restricting American companies or their branches from any project funded by the federal government, including the TTC’s planned subway car expansion.
Freeland said she would immediately convene a summit of leaders of countries that Trump is threatening with either tariffs or takeover: Mexico, Denmark, Panama, and the President of the European Union.
In a Radio-Canada interview on the Sunday night talk show Tout le monde en parle, Freeland said Trump had in the past nicknamed her “the killer,” and that he “does not respect weakness,” adding “capitulation” is not a negotiating strategy with him.
“Donald Trump is using uncertainty to unsettle Canadians. We must do the same. U.S. exporters need (to) worry whether their businesses will be the ones we hit,” she wrote in the policy statement.
Freeland’s main rivals for Trudeau’s job, Mark Carney and Karina Gould, have not released detailed policy positions on Canada-U.S. relations but they have both said they support robust “dollar-for-dollar retaliatory tariffs by Canada. In a media release, Carney said they should be “aimed where their impacts in the United States will be felt the hardest. Every dollar raised by Canadian tariffs should be used to help support Canadian workers through this fight.”
Conservative Leader Pierre Poilievre and NDP Leader Jagmeet Singh have supported dollar-for-dollar retaliation, but Poilievre has not supported energy export tariffs, while Singh has called for Canada to halt critical minerals to the U.S.
Trump, in his weekend remarks to the press pool on board Air Force One, upped his previous erroneous claim that the U.S. has a $200 billion trade deficit with Canada which he calls a “subsidy,” saying now that the U.S. “loses” $250 billion a year in a “subsidy” on Canada.
Ottawa continues to make the case that Canada’s oil and gas exports make up the largest part of Canadian goods exported to the U.S., and account for the trade imbalance. In 2023, Ottawa says, the U.S. merchandise trade deficit with Canada was $64.3 billion (USD) and entirely driven by energy products. Excluding energy, the U.S. sells more to Canada than Canada sells to the U.S. The federal Liberals say the trade deficit “reflects strong U.S. household spending and high demand for energy imports.”
But Trump continues to pitch it as a loss for the U.S., saying “it’s not fair to us.”
“And they (Canada) do about almost 90 per cent of their business with the United States, whereas with us, it’s the opposite. It’s, you know, relatively small.”
The United States’ own figures dispute Trump’s view. A congressional research paper updated two weeks ago says that Canada is America’s second biggest trading partner behind Mexico and ahead of China when it comes to products that the U.S. imports. Canada is first when it comes to American products shipped abroad, ahead of Mexico, China, Germany or Britain. It also says that in 2023, Canada exported 77 per cent — not 90 per cent — of its goods to, and imported almost half of its goods from, the United States.
“I don’t want to spend hundreds of billions of dollars on supporting a country unless that country is a state,” Trump said. “And if it is a state, the people of Canada would pay a much lower tax. You know, their taxes would be cut in half. They would have no military problems. They’d be much more secure in every way.”
