OTTAWA, Canada: Canada’s Foreign Minister Mélanie Joly on Saturday warned the United States that American consumers will bear the cost of a “Trump tariff tax” if President-elect Donald Trump follows through on his threat to impose a 25 percent tariff on all Canadian goods.
Joly said that Canada is prepared to retaliate with robust countermeasures, which could escalate trade tensions between the two deeply integrated economies.
“If we need to respond, we will, and Americans will soon experience the consequences of Trump’s tariff tax,” Joly emphasised, adding that Canada is prepared for an effective counterstrategy.
Joly made these remarks after meeting with US senators in Washington on Friday, where she underscored Canada’s readiness to retaliate with full force against the US.
However, she clarified, “no action would be taken until Ottawa sees the details of Trump’s executive order.”
Trump has previously hinted at imposing broad tariffs on Canada, Mexico, and other trading partners, leading to widespread speculation about whether this is a serious policy initiative or merely a negotiation tactic.
Despite the potential rise in tariffs, Trump has downplayed the likelihood of increased inflation, claiming that Americans will soon understand the full impact.
Joly confirmed that Canada would implement an initial round of retaliatory measures, with the possibility of additional rounds if Trump proceeds with his tariff plan.
Potential targets for Canada’s retaliation include US exports such as orange juice, toilets, and certain steel products. Canada’s response would mirror the countermeasures it took during Trump’s first term when tariffs were imposed on Canadian steel and aluminium.
The looming threat of tariffs could have substantial consequences for both nations. The US and Canada have deeply integrated economies, particularly in industries like auto manufacturing, where parts frequently cross the border multiple times before final assembly.
A 25 per cent tariff could disrupt these sectors, adversely affecting the North American auto industry and potentially putting American jobs at risk.
Prime Minister Justin Trudeau also warned that such tariffs would harm the North American auto sector. “These tariffs will hurt the North American auto industry and jeopardise American jobs,” he said.
Joly’s trip to Washington involved meetings with US Senators Lindsey Graham, James Risch, Jeanne Shaheen, John Thune, and outgoing US Secretary of State Antony Blinken.
According to Joly, many U.S. lawmakers were taken aback and expressed concern upon learning about the potential repercussions for the US economy, with some voicing opposition to such tariffs.
Canada is a major trade partner for the US, with 36 US 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 daily. Joly pointed out that many Americans are unaware of how crucial Canada’s role is in the US economy.
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A 25 per cent tariff could have profound economic consequences. An analysis by the Canadian Chamber of Commerce suggests it could shrink Canada’s GDP by 2.6 per cent and the US GDP by 1.6 per cent, disrupting key sectors like agriculture and energy.
Former Canadian Finance Minister Chrystia Freeland, now a candidate for Prime Minister, warned that Canada’s response to any tariffs would be equally forceful.
“If pushed, our response will be the single largest trade blow the US economy has ever faced,” Freeland wrote in the Toronto Star, forecasting significant damage to American industries, including Florida’s orange growers, Michigan’s dishwasher manufacturers, and Wisconsin’s dairy farmers.