Canada prepares to face Donald Trump’s trade threats

On Monday, hours after taking office for the second time, Donald Trump said tersely that his desire to impose 25% tariffs on Mexican and Canadian imports could become a reality on February 1. Trump had stated in November that such a tariff charge would take effect on the first day of his return to the White House. Canadian Prime Minister Justin Trudeau has been preparing for weeks for this scenario of trade friction, despite the fact that the Liberal politician will leave office on March 9. On Tuesday, Trudeau promised a “robust, swift and measured” response from Canada in case Trump makes good on his promise. But this Thursday the Republican was back on the attack in his speech at the Davos Economic Forum: “We have a tremendous deficit with Canada. We’re not going to have that anymore. We can’t do that.” Trump added that the U.S. economy does not need its northern neighbor.

The president’s words sounded like a retort. According to Trudeau, the “golden age” that Trump predicts for the United States does need Canada’s support, citing products such as aluminum and steel, as well as energy supplies. Trudeau has held several meetings with his team of closest aides and provincial premiers to address how Canada should respond to the imposition of these tariffs.

The Canadian authorities emphasize the high level of integration of both economies and the benefits for each side of the dividing line, pointing out that Canada buys more from the United States than China, Japan, and Germany combined. Likewise, Ottawa has also stressed the plan it approved in December — worth some $1.3 billion Canadian dollars — to strengthen border security in order to temper the Republican’s remarks.

In case these arguments do not convince the Trump administration, Canada is contemplating different steps to hit back at the tariffs. The federal government and the provinces agreed on a plan that includes a first retaliation in tariffs of about $37 billion Canadian dollars on U.S. products. The list includes, among other items, citrus juices, ceramic containers, and certain spirits. The second stage would consist of another tariff charge that could reach $110 billion if the United States decides not to back down. Finally, a last resort could result in a reduction in the volumes of energy shipped to U.S. soil.

Some provincial premiers have stood out at this juncture. Doug Ford, premier of Ontario (the most populous and economically powerful province), has expressed his displeasure with Trump’s tariff threats in various U.S. media, noting that hundreds of thousands of jobs would be at risk on both sides of the border. Ford has worn a cap at some appointments with a message that has not gone unnoticed: “Canada is not for sale.” François Legault, premier of Quebec, has indicated that he will defend Quebecers, “whatever it takes,” in a scenario he compares to that of the pandemic. Alberta Premier Danielle Smith, for her part, has opted for an approach that runs counter to that of Ottawa and the other provinces. Smith is opposed to considering any scenario that contemplates a reduction in energy supplies to the United States, since Alberta leads Canadian hydrocarbon production. Her visit to Trump’s residence in Mar-a-Lago (Florida) on January 12 also caused a stir in Canada.

Mark Carney, Chrystia Freeland and Karina Gould are the leading candidates to replace Trudeau as leader of the Liberal Party of Canada and as prime minister. These three contenders have already promised to defend the country vigorously in the face of Trump’s threats. Pierre Poilievre, leader of the Conservative Party of Canada and favorite in the polls, said Wednesday that it is crucial to call early elections to elect a strong government to face Trump.

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