Canada is ready to fight back against Trump’s tariffs – “No limits”

Canada has had enough. Justin Trudeau, the outgoing prime minister, is making one thing clear: if President Donald Trump wants a trade war, Canada is ready to bring the heat.

Speaking on MSNBC, Trudeau explained that Canada isn’t looking for a fight, but it won’t hesitate to hit back if Trump’s tariff threats become reality.

The country is the United States’ top trading partner, importing $320 billion worth of American goods in the first 11 months of last year, according to US Commerce Department data. Yet, despite this massive trade volume, the US still recorded a $55 billion trade deficit with Canada over the same period. Trudeau wasted no time pointing out the stakes for American jobs, saying:

“We are the number one export partner of about 35 different US states. Anything that thickens the border between us ends up costing American citizens and American jobs.”

Trudeau’s warning: “Don’t test us”

Trudeau isn’t bluffing. Canada has been here before, and it knows how to fight back. In 2018, during Trump’s first term, the US slapped tariffs on Canadian steel and aluminum. Canada responded swiftly with counter-tariffs targeting US products like household appliances, bourbon whiskey, and boats.

This time, the stakes are even higher. Trump’s team is reportedly considering a broad 25% tariff on goods from Canada and Mexico. Canada already has a retaliation plan in the works.

A draft proposal circulating within the Canadian government suggests hitting almost every category of products imported from the US, according to Bloomberg.

On top of that, Trudeau pointed out the billions of dollars Canada has poured into border security measures to address Trump’s concerns about illegal immigration and drug trafficking. “Less than 1% of the fentanyl entering the US comes from Canada,” Trudeau said.

“We’ve responded to his requests by strengthening our borders with helicopters, drones, and more.” But even with these investments, Trump’s taunts—like his suggestion of turning Canada into the 51st US state—are proving to be a distraction from the real issues at hand.

Energy and retaliation: Canada’s economic leverage

Energy could be Canada’s trump card in this fight—pun absolutely intended. Alberta Premier Danielle Smith recently met with Trump at his Mar-a-Lago estate to discuss the crucial US-Canada energy relationship.

More than half of America’s crude oil imports come from Canada, most of it from Alberta. When asked if Canada could curb oil exports as a countermeasure, Foreign Affairs Minister Mélanie Joly put it like this: “Everything is on the table.”

Ontario Premier Doug Ford has also weighed in. In December, he floated the idea of cutting off electricity exports to US border states, which rely heavily on Canadian energy.

However, Ford pivoted last week, proposing a new partnership to expand nuclear energy exports to the US. While Ford’s softer stance may offer some hope for collaboration, Canada’s provincial premiers are planning a February visit to Washington to drive home the economic harm tariffs would cause on both sides of the border.

Trudeau’s decision to step down as prime minister by March has added political uncertainty to the mix. His nine-year tenure has seen its fair share of highs and lows, but his approval rating tanked last year, dropping below 30%, according to the Angus Reid Institute.

The December resignation of Finance Minister Chrystia Freeland only fueled the fire, with her departure seen as a protest against “costly political gimmicks” and a warning to keep financial resources ready for a trade war.

The race to replace Trudeau is heating up. His successor will inherit not only the political mess but also the responsibility of managing Canada’s response to Trump’s aggressive trade policies. A national election is due by October, but if opposition parties can mount a no-confidence vote, it could come even sooner.

Trump’s economic vision

Trump’s tariff obsession is a cornerstone of his broader economic philosophy. Stephen Miran, Trump’s pick to chair the Council of Economic Advisers, is a key architect of this strategy. Miran has argued for sweeping tariffs, suggesting rates as high as 50%, compared to the current 2%.

He’s even proposed moving away from a strong-dollar policy to address trade imbalances and strengthen US industries. Miran’s views, outlined in his November report, are controversial but grounded in economic theory.

He describes tariffs as a tool to correct what he sees as the US’s overvalued dollar and hollowed-out industrial base. While Miran acknowledges the risks, he believes these policies could fundamentally reshape global trade and finance systems.

Miran has cited research suggesting that a 20% tariff could maximize benefits for the US economy. But even he admits that the margin for success is slim. “There is a path by which these policies can be implemented without material adverse consequences, but it is narrow,” he wrote.

Critics argue that while tariffs might boost certain industries in the short term, they could also hurt consumers and disrupt global supply chains.

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