Canada threatens ‘single largest trade blow’ to U.S. if Trump follows through on tariffs

Anita Anand participates in a media availability after being sworn in as Minister of Transport during a ceremony at Rideau Hall in Ottawa in Ottawa, on Thursday, Sept. 19, 2024. THE CANADIAN PRESS/Justin Tang (Justin Tang/The Canadian Press)

Transport and Internal Trade Minister Anita Anand says Canada is ready to take on U.S. president-elect Donald Trump and levy countermeasures immediately, should the incoming commander-in-chief follow through with his threat to impose punishing tariffs on all Canadian imports on day one of his presidency.

“Retaliatory measures are ready, and we will use all tools in our toolbox to ensure that we’re protecting Canadian workers and Canadian industry,” Anand said in an interview on CTV’s Question Period, airing Sunday.

“If pushed, our response will be the single largest trade blow the U.S. economy has ever endured, given that Canada is America’s largest export market — larger than China, Japan, the U.K. and France combined,” Anand told host Vassy Kapelos.

Trump will be inaugurated on Monday, and has pledged a flurry of executive orders on his first day back in the Oval Office. Among them is an across-the-board tariff of 25 per cent on all Canadian imports.

Trump initially used the flow of illegal migrants and drugs over the border as the rationale for the imposing the steep tariffs, but the president-elect has since shifted his rhetoric to praising the use of tariffs on their own merit. Economic experts, meanwhile, have warned of the devastating effects the measure could have on both economies, especially if Canada and the United States enter into a trade war.

Anand — who is also a member of Prime Minister Justin Trudeau’s cabinet committee on Canada-U.S. relations — told Kapelos the federal government does “not have any information” about what it can actually expect Trump to do.

“But we do know that at all times, we must protect Canadian industry and Canadian workers, and Canada itself,” Anand said. “And what that means is that we have to employ a strategy of mirroring; not escalating, but responding in kind.”

“And we have planned multiple rounds of counter tariffs against the United States, which we will not hesitate to use, if necessary,” she also said, adding that the impacts on the U.S. economy of Canada’s potential retaliation would be “severe.”

According to a senior government source with close knowledge of the file, no one from the incoming U.S. administration has explicitly said what Canada can expect as of day one of Trump’s presidency, and different information has been conveyed from different people.

The overall consensus is the tariffs are coming, but that senior government source also said they’d be surprised if the tariffs were as severe as the president-elect has threatened, at least in the immediate term.

The Canadian government is readying a three-phased response it could begin rolling out as early as inauguration day, depending on what Trump does.

In a press conference in Washington, D.C., Friday, Foreign Affairs Minister Melanie Joly struck a similar tone.

“The 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,” she said.

“If we need to retaliate, we will do so,” she also said. “And Americans will discover Trump tariff tax.”

The United States is Canada’s largest trading partner, with the annual trade relationship between the two countries adding up to about $1.3 trillion. Canada is also the largest export market for 36 U.S. states.

Consequently, economic experts have warned a 25 per tariff could have severe consequences to the Canadian economy and risk millions of jobs.

Alberta, feds divided on whether to leverage energy exports

In the leadup to inauguration day, Canadian officials have repeatedly said cutting off energy exports to the U.S. — or implementing an export tax on them — remains on the table as a possible response to Trump’s tariffs, depending on their severity.

Alberta Premier Danielle Smith, however, pushed back against that this week, refusing to sign the joint communique following a special meeting of the premiers and prime minister.

“Until these threats cease, Alberta will not be able to fully support the federal government’s plan in dealing with the threatened tariffs,” Smith later wrote in a post on social media.

When asked by Kapelos whether energy is part of the government’s planned counter-tariff package, Anand said there will be “no stone unturned.”

“And that means considering all sectors, because we have to ensure and that we are hitting back when necessary,” she said.

But when pressed on Smith’s argument that it’s unfair for Alberta to shoulder the burden of the Canadian response after — in Smith’s view — federal Liberal policies have limited the oil and gas sector’s ability to diversify its market, Anand insisted Canada needs to mount a cross-sector counter-tariff response to Trump.

“We know that the United States and its citizens are heavily dependent on various aspects of Canadian manufactured and raw-material goods, including energy,” Anand said. “So we need to take that comprehensive look at all sectors, and we need the provinces and the premiers to be united in this fight.”

Americans lack ‘comprehensive understanding’ of relationship: Anand

To prepare for Trump’s second term, Trudeau announced a so-called Team Canada approach to U.S. relations nearly a year ago.

Since then, he’s also reconvened his cabinet committee — of which Anand is a member — and as of Thursday, struck a new Canada-U.S. relations council, comprising 18 prominent Canadians.

“Ministers have been in Washington, D.C., they’ve been speaking with various elected officials there, and what we see is that there isn’t a comprehensive understanding of the impact that these counter tariffs would have,” Anand told Kapelos. “There isn’t a comprehensive understanding of the integrated nature of the Canada-U.S. economy.”

“So we do need to continue to ensure that that message, that Canadian message; that patriotic, truly nationalistic message, is heard on both sides of the border,” the minister added.

When pressed on the effectiveness of Canada’s communications strategy and why the message of integration doesn’t appear to be punching through, Anand pointed to newly announced border security measures as evidence Canada is willing to work with Trump and address his concerns.

“And we will continue to ensure that, from an economic perspective, the counter-tariff possibility will be heard as well,” Anand said.

“We will continue to reiterate the integrated nature of the Canada-U.S. economy,” she added. “And if pushed, our response will be the single largest trade blow the U.S. economy has ever endured. That is extremely important for us to stress time and time again.”

You can watch Anand’s full interview on Question Period this Sunday at 11ET/8PT on CTV.

With files from Vassy Kapelos and Brennan MacDonald