Canada fires back with 25% tariffs of its own on American goods

Canada to ban thermal coal exports by 2030Prime Minister Justin Trudeau. (Image courtesy of Prime Minister website.)

Canada responded in kind to U.S. President Donald Trump’s 25% tariff on Canadian goods with the same levy on $155 billion of American products.

Ottawa is also considering several non-tariff measures that include critical minerals, energy procurement and other partnerships, Prime Minister Justin Trudeau said Saturday night.

He said Canadians are “perplexed” by Trump’s move as head of a long-time ally and trading partner to impose 25% tariffs on Canada, which he did through an executive order Saturday afternoon. Trudeau addressed the American people directly in his remarks.

“Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities,” Trudeau said. “They will impede your access to an affordable supply of vital goods crucial for U.S. security, such as nickel, potash, uranium, steel and aluminum.”

Canada is to impose its measures on $30 billion of American goods on Tuesday, the same day as the U.S. duties – which are also targeting Mexico at 25% and China at 10% – are to take effect. Ottawa is to enact the remaining $125 billion in 21 days, the prime minister said.

Trade war

The trade war blows up the three-decade-old North American free trade agreement which Trump renegotiated in his first term. It sets on edge the largest cross-border economic integration in the world which includes $3.6 billion a day in trade, much of it in natural resources like minerals, oil and lumber.

The countries have also fostered a military and security partnership that’s existed for nearly a century, from Quebec aluminum to build U.S. World War Two arms, through refuge for 9-11 plane passengers in Newfoundland, to Canadian water bombers dousing California wildfires this month.

Canada’s response means that Canadians from Tuesday will likely pay more for American alcohol such as beer, wine and bourbon if they choose to buy it. The measures will target orange juice, vegetables, perfume, clothing and shoes, Trudeau said. Also affected are major consumer products like household appliances, furniture and sports equipment, materials such as lumber and plastics, and “much, much more.”

Oil, uranium

Trump’s tariff on Canadian energy at 10% covers oil, gas and hydroelectricity. Alberta Premier Danielle Smith has been opposed to increasing America’s pain by imposing export taxes on the province’s heavy crude headed south, which accounts for some 20% of American daily oil use.

Saskatchewan Premier Scott Moe has expressed concern about retaliatory tariffs that will affect his province’s chief exports, potash and uranium. Canada is the biggest supplier of the nuclear mineral to the U.S. where production is only a fraction of consumption.

Trudeau said Canada’s response is unified.

“We will not be moving forward on measures that will further split the country,” he said, without first talking to all provincial, regional and industrial leaders. Canada’s retaliation is to be borne equally across the country, he said.

Texas Governor Greg Abbott said on X: “Careful Trudeau. The Texas economy is larger than Canada’s. And we’re not afraid to use it.”

Premiers

Canadian provincial premiers were quick to fire their own salvos, with vows to remove American alcohol from government-run stores in Ontario, British Columbia and Nova Scotia. 

B.C. Premier David Eby singled out the resources industries as his province’s most vulnerable sector. His government has identified 10 major projects to expedite immediately, including mines, renewable energy and natural gas, accounting for $20 billion of investment that would create more than 6,000 jobs.

“We’re accelerating permit approvals on critical mining and low carbon energy projects,” Eby told reporters on Saturday evening. “We’re expanding trading partnerships with countries in Asia, Europe and beyond. We already have new trade missions planned to strengthen relationships across the world.”

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