Trudeau hits back at the U.S. with big tariffs after Trump launches a trade war

Retaliation comes after U.S. President Donald Trump slapped 25% tariffs on goods

John Paul Tasker · CBC News

• Trump’s imposing a 25 per cent tariff on virtually all goods from Canada, and levying tariffs of 25 per cent on Mexican goods, 10 per cent on China products, all expected to take effect Tuesday.
• In response, Trudeau announced Canada will hit back against the U.S. with tariffs on $155 billion worth of American goods in the coming days.

Prime Minister Justin Trudeau announced late Saturday the federal government will hit back against the U.S. after President Donald Trump launched a trade war this weekend with punitive tariffs on all Canadian goods.

Trudeau said Canada won’t stand for an attack from a country that was supposed to be an ally and friend.

Ottawa will immediately levy retaliatory tariffs on a whole host of American goods as payback for Trump’s attempt to wreck the Canadian economy, Trudeau said.

To start, Canada will slap 25 per cent tariffs on $30 billion worth of American goods coming into Canada as of Tuesday. The tariffs will then be applied to another $125 billion worth of American imports in three weeks’ time.

“We don’t want to be here, we didn’t ask for this, but we will not back down in standing up for Canadians,” Trudeau said.

Prime Minister Justin Trudeau said on Saturday that Canada will respond to Donald Trump’s tariffs with 25 per cent tariffs on $155 billion of U.S. goods.

The prime minister said American liquor like beer, wine and spirits, vegetables, clothing, shoes and perfume will be among the first items to face Canadian retaliatory tariffs. Canada will also put tariffs on American consumer products such as household appliances, furniture and sports equipment.

Trudeau said there is more non-tariff trade action coming to try to force Trump’s hand and get him to call off the hostilities.

Those actions are still to be decided but could include measures like restrictions on the export of critical minerals and energy products to the U.S. and a move to block American companies from bidding on government contracts, he said.

After announcing Canada’s response to U.S. tariffs, Prime Minister Justin Trudeau said the coming days will be ‘difficult for Canadians, and they’ll be difficult for Americans.’ Trudeau said Canada will levy a 25 per cent tariff on $155 billion worth of U.S. goods in response to U.S. President Donald Trump’s 25 per cent tariffs on most Canadian goods.

Trudeau urged Canadians to rally around the flag and choose Canadian products wherever possible to support embattled businesses. He asked shoppers to check labels before buying anything at the grocery store.

“Find your own way to stand up for Canada. In this moment, we must pull together because we love this country,” he said.

While Trump has threatened to raise tariffs even higher if Canada retaliates, Trudeau said he was unbowed.

“We’re not looking to escalate, but we will stand up for Canada, Canadians and Canadian jobs. That’s my job and that’s exactly what we’re doing,” he said.

Trudeau said he’s been trying to reach Trump since his inauguration two weeks ago but hasn’t heard back.

He said he wants to relay to Trump that it’s better to tackle challenges such as drugs and migrants together as partners rather than as combatants in a trade dispute.

“People are upset and hurt by what’s gone on here,” Trudeau said. “But I have faith.”

Trump slaps 25% tariff on Canadian goods

Trump launched a trade war against Canada earlier Saturday by imposing a 25 per cent tariff on virtually all goods from this country — an unprecedented strike against a long-standing ally that has the potential to throw the economy into a tailspin.

Trump’s long-threatened plan to inflict economic pain on Canada has materialized on the day he said it would, and it includes a 10 per cent tariff on Canadian energy products. Trump is also levying tariffs of 25 per cent on all Mexican goods and 10 per cent on goods from China.

Premiers decry Trump’s tariffs, announce countermeasures and call for federal response

These potentially devastating tariffs are slated to take effect on Tuesday and remain in place until Trump is satisfied Canada is doing enough to stop the flow of fentanyl into the U.S.

“The extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency,” a White House fact sheet on the tariffs reads.

“President Trump is taking bold action to hold Mexico, Canada and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”

Trump wants to ‘stem the tide of illicit drugs’

In the executive order officially imposing the tariffs, Trump writes Canada has played “a central role” in the U.S.’s fentanyl challenges, despite American government data that shows comparatively little of the drug has been seized at the northern border in recent years.

Trump said Canada has failed to “devote sufficient attention and resources or meaningfully co-ordinate” with the U.S. to “stem the tide of illicit drugs.”

Police in Canada have been carrying out fentanyl busts across the country, including one of the largest in Canadian history, in British Columbia last November.

President Donald Trump speaks to reporters as he signs executive orders in the Oval Office of the White House, in Washington, D.C., on Friday. (Evan Vucci/The Associated Press)

There’s a reason Trump is framing the expected tariffs as a response to an “emergency” drug and migrant crisis: It gives him the leeway to impose tariffs even though the new NAFTA is in place to prevent exactly these sorts of levies.

Experts have said trade action of this magnitude has the potential to shave billions of dollars off of Canada’s gross domestic product and plunge the country into a painful recession requiring government stimulus to prop up the economy.

Canada must ‘hit back and hit back hard,’ Ford says

Ontario Progressive Conservative Leader Doug Ford, who currently leads the premiers as head of the Council of the Federation, said Canada has “no choice but to hit back and hit back hard.”

Ford recently called a snap provincial election, saying he wanted a stronger mandate to deal with tariff issues.

“The coming days and weeks will be incredibly difficult,” Ford said. “Trump’s tariffs will devastate our economy. They’ll put 450,000 jobs at risk across the province. Every sector and region will feel the impact.”

Analysis

Trump is starting a trade war. If he wants to absorb Canada, what comes next will be worse

Alberta Premier Danielle Smith, who has been reluctant to support aggressive trade action against the U.S. until now, said in a statement that Trump’s “mutually destructive policy” demands a response.

She said she supports “the strategic use of Canadian import tariffs on U.S. goods that are more easily purchased from Canada and non-U.S. suppliers.”

Nova Scotia Premier Tim Houston said he is taking action right away in response to what he called Trump’s “remarkable” broadside.

Nova Scotia Premier Tim Houston, centre, speaks to Quebec Premier François Legault, right, beside Ontario Premier Doug Ford. (Darren Calabrese/Canadian Press)

Houston said Nova Scotia will double highway tolls for U.S. commercial vehicles and direct the Nova Scotia Liquor Corporation to remove all U.S. liquor from its shelves as of Feb. 4.

Trump’s move Saturday shows no country is safe from his push to dramatically reshape the U.S. economy, roll back globalization and torpedo free trade deals like the Canada-U.S.-Mexico Agreement, that he signed in his first term.

Some $800 billion worth of goods crossed the Canada-U.S. border in the first nine months of 2024 alone, according to Canadian government data.

Trump’s tariffs could drive down the flow of those goods with major ramifications for businesses and workers on both sides of the 49th parallel given just how intertwined the two countries are after decades of liberalized trade.

Data breaks down what’s driving trade deficit

Trump is delivering on a campaign promise to seek retribution from countries he claims are “ripping off” the U.S.

By doing so, he is ignoring data that indicates the Canada-U.S. trade deficit is largely driven by American demand for cheaper Canadian oil. When oil exports are excluded, the Americans actually have a trade surplus with Canada, according to Canadian government data.

A statement by the White House on Saturday says U.S. President Donald Trump has imposed tariffs on imports from Canada, Mexico and China. The tariff order on Canada is 25 per cent on all imports, and 10 per cent on oil and gas to ‘minimize rise in costs.’

Trump has cited wildly inaccurate trade deficit figures in the past, claiming at different times it’s anywhere from $100 billion to $200 billion. The U.S. government’s own data suggests the trade in goods deficit with Canada was $55 billion US as of November 2024.

Trump has also said the tariffs are to punish Canada for being lax on drugs and migrants even as the U.S. government’s figures show less than one per cent of fentanyl and illegal migrants are coming from this country.

U.S. President Donald Trump’s plan to add tariffs on Canadian goods starting on Feb. 4 signals the U.S. is ‘fundamentally changing’ and Canada has to adapt quickly to ‘pivot to a new world,’ says Goldy Hyder, president and CEO of the Business Council of Canada.

Figures from U.S. Customs and Border Protection (CBP) show the agency seized 19.5 kilograms of fentanyl at the northern border last year, compared to a whopping 9,570 kilograms at the southwestern one.

The president teased for weeks that if Canada did more to crack down on the border, the country might get a reprieve from his trade actions.

The Canadian government delivered a billion-dollar border plan, but it wasn’t enough.

The trickle-down effects of tariffs

Starting next week, American companies will be forced to pay tariffs to the U.S. government on the Canadian goods they import.

Those added costs could make some Canadian goods less competitive compared to those made in the U.S. or coming from other countries.

If Canadian companies can’t sell their products into the U.S. at the same volume, some of them may have to close down or scale back and lay off workers.

But some goods can’t easily be replaced, and there are potential knock-on effects for the U.S. economy, such as higher prices for American consumers.

Ahead of a meeting with the prime minister and fellow premiers, Newfoundland and Labrador Premier Andrew Furey said the threat of U.S. tariffs is not just an economic attack but one on Canada’s values, sovereignty and identity. Furey told CBC’s Rosemary Barton the response needs to be firm but responsible, even as President Donald Trump warned Canada against retaliation.

Before Trump imposed his tariffs, the Canadian government said U.S. gas prices could jump some 75 cents US a gallon overnight if he went ahead with tariffs.

Some U.S. Midwest refineries are entirely reliant on heavy crude from Alberta, and the Americans don’t produce nearly enough oil on their own to meet demand.

The cost of electricity could also get immediately more expensive because many U.S. states rely on power from energy-rich provinces like B.C., Ontario and Quebec to keep the lights on in millions of American households.

Canadian lumber, favoured by U.S. homebuilders, will also spike, driving up the cost of new homes at a time when home prices have never been higher in the U.S.

Poilievre wants Parliament recalled

Conservative Leader Pierre Poilievre condemned what he called Trump’s “massive, unjust and unjustified tariffs.”

He urged the Liberal government to recall Parliament — it’s prorogued until late March as the Liberals choose a leader to replace Trudeau — and enact retaliatory measures, including dollar-for-dollar tariffs on U.S. goods, with all the money raised going to “help for affected workers and businesses.”

As part of what he’s calling his Canada First Plan, Poilievre also wants the government to implement a “massive” tax cut and pursue swift approvals for new pipelines, mines and liquefied natural gas (LNG) plants to help bolster the economy.

“We will protect our economy, defend our sovereignty, bring home production and paycheques, and never back down,” he said.

With files from David Cochrane

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