Canada is gearing up to impose retaliatory tariffs on a range of US imports, including ceramics, steel, and furniture, in response to President-elect Donald Trump’s threats to target Canadian exports. The move highlights Canada’s readiness to defend its trade interests amid escalating economic tensions. Officials have indicated that as a last resort, the measures may extend to taxing energy exports to the US.
Canadian authorities have reportedly drafted a list of American goods that could face tariffs if Trump proceeds with his stated intent to exert “economic force” against Ottawa. Items under consideration include alcoholic beverages, orange juice, pet food, and other products. According to sources familiar with the matter, no final decision has been made on implementing these measures, but the preparations underscore Canada’s determination to protect its economic interests.
Canada’s Trade Leverage
Canada’s Foreign Minister Mélanie Joly expressed the country’s firm stance on safeguarding its trade relationship with the US. “I think we have to be ready,” Joly said, emphasizing the importance of protecting Canadian interests. She pointed out that Canada has significant leverage in maintaining a fair trade balance and urged careful consideration of Trump’s threats.
Joly further noted that the stakes are high, particularly given Canada’s position as a key trading partner to the US. “We stand ready to defend our economic interests while continuing to seek constructive engagement,” she added.
Joly’s Focus Amid Political Developments
In a surprising development, Joly announced that she would not pursue leadership of the Liberal Party following Prime Minister Justin Trudeau’s resignation earlier in the week. Instead, she has pledged to focus on countering the economic challenges posed by the incoming US administration.
“While I am confident in my ability to lead the Liberal Party and make history as its first female leader, the urgency of the unjustified tariff threats and other economic pressures from President-elect Trump demand my full attention,” Joly stated in a letter shared on social media.
The Economic Stakes of Canada-US Trade
Canada’s trade relationship with the US is critical, as it remains the largest trading partner of the world’s largest economy. In 2023, Canada was the primary supplier of crude oil to the US, with oil imports valued at $419 billion.
Recent government statistics reflect a growing trade surplus with the US, driven by increased exports. In November 2024, Canadian exports to the US rose by 6.8%, while imports grew by 4.1%. This resulted in a trade surplus of $8.2 billion, up from $6.6 billion in October.
With Trump’s threats looming, Canada is poised to take decisive action to ensure the stability of its economy and the fairness of its trade relationship with the US. As the situation unfolds, both nations face significant stakes in maintaining their deep economic ties.
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