Ottawa is ready to retaliate if U.S. president-elect Donald Trump slaps Canada with devastating tariffs, Prime Minister Justin Trudeau promised Friday 91Ƶ and his ministers say Republicans in Washington don91Ƶt fully understand the likely impact of the duties on both countries91Ƶ economies.
91ƵWe will not hesitate to act,91Ƶ Trudeau said at a meeting of the newly formed Council on Canada-U.S. Relations in Toronto. 91ƵWe will respond and, I will say it again, everything is on the table.91Ƶ
The incoming president has promised to apply 25 per cent across-the-board tariffs on imports from Canada when he returns to the White House on Monday.
Foreign Affairs Minister Mélanie Joly is in Washington this week and met Thursday with Republican Senate Majority Leader John Thune, as well as Republicans Lindsey Graham and James Risch, chairman of the U.S. Senate Foreign Relations Committee. She said tariffs would launch a 91Ƶtrade war91Ƶ between Canada and the U.S.
91ƵIf we need to retaliate, we will do so,91Ƶ Joly told reporters Friday. 91ƵThe 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.91Ƶ
Canada has multiple options for retaliatory tariffs ready to go depending on what Trump ultimately does, said two federal government sources with knowledge of the tariff response plan. They were not authorized to speak publicly about details of the plan.
If Trump sets the tariffs at 25 per cent, Canada91Ƶs response would be to impose counter-tariffs worth roughly $37 billion, and possibly follow up with another $110 billion in tariffs. If the duties are lower, Canada91Ƶs tariff response would be more modest.
No decision will be made until Ottawa sees the wording of Trump91Ƶs executive order imposing the tariffs.
Energy and Natural Resources Minister Jonathan Wilkinson, who was in Washington this week, said Thursday that Trump91Ƶs tariff plan isn91Ƶt even clear to Republican senators and congresspeople.
Wilkinson said he91Ƶs heard of three tariff options being considered: 25 per cent tariffs, 10 per cent tariffs and a lower duty that ratchets up over time.
There91Ƶs been disagreement among the premiers on how Canada should respond if Trump follows through on his threats. Most premiers presented a united front following a meeting with Trudeau in Ottawa earlier this week.
Alberta Premier Danielle Smith broke from the pack by refusing to consider possible levies on oil exports.
Former finance minister Chrystia Freeland, who confirmed her intention to run for the Liberal leadership on Friday, has suggested a dollar-for-dollar tariff response. Trudeau has said he supports the principle of a proportional dollar-for-dollar response.
While Canada has been planning its tariff response for weeks, Republicans only recently returned to Capitol Hill, said Joly.
Joly said she still hopes duties can be avoided by making the case that tariffs would damage both the Canadian and American economies.
91ƵWhen I talk about the tariffs themselves and their impact, people in Washington are surprised,91Ƶ Joly said Friday. 91ƵAnd when I mention the impacts of a Trump tariff tax on Americans, they are not only surprised, they are very worried.91Ƶ
Goods worth $3.6 billion cross the Canada-U. S. border every day. A Canadian Chamber of Commerce analysis said 25 per cent tariffs could shrink Canada91Ƶs gross domestic product by 2.6 per cent and America91Ƶs by 1.6 per cent. It would also disrupt the automotive, agriculture and energy sectors, among others.
91ƵAmericans are just waking up to this possibility,91Ƶ Joly said.
Bea Bruske, president of the Canadian Labour Congress (CLC), told The Canadian Press her organization is 91Ƶvery concerned91Ƶ about the impact of tariffs on jobs.
91ƵWe think that this is an all-hands-on-deck moment where government, business, labour needs to come together to navigate how we91Ƶre going to respond,91Ƶ Bruske said, adding that workers91Ƶ voices need to be included in those conversations.
She the sectors most vulnerable to tariffs include manufacturing, mining, the energy sector, agriculture and forestry.
91ƵThese are the jobs that are really the backbone of our economy across the country and the different provinces and regions,91Ƶ Bruske said, adding that job losses in those areas would have spinoff effects on other sectors like retail, education and health care.
She called for a 91Ƶstrong social safety net91Ƶ so that 91Ƶif there are job disruptions 91Ƶ workers can continue to be able to function in the communities that they live in.91Ƶ
When asked about potential retaliation measures, Bruske said it91Ƶs too early to tell what they could look like. She said counter-tariffs could work but a trade war would hurt workers on both sides of the border.
Bruske said the CLC is working with the labor movement in the U.S. to identify opportunities for collaboration.
91ƵWorkers are feeling more and more pressure being able to make ends meet and an additional challenge in terms of potential job losses is just one more thing for people to worry about,91Ƶ she said.