Canadian Prime Minister Justin Trudeau has stated that US President Donald Trump implemented tariffs on Canada to undermine the country’s economy, making it more feasible for the United States to annex its northern counterpart.
This alert regarding Mr. Trump’s threat to Canadian sovereignty was issued as the US president fulfilled his promise to enact 25% tariffs on all Canadian products.
In response, Canada swiftly retaliated with 25% tariffs on C$30 billion worth of US imports, initiating a trade war between once-close allies and jeopardizing future commerce along a border that sees billions of dollars in daily transactions.
If the US tariffs continue, Canada will implement a 25% tariff on an additional C$125 billion of US imports in 21 days, according to Mr. Trudeau.
Mr. Trump has asserted that the tariffs are essential to compel Canada to take action against what he refers to as the influx of undocumented migrants and the drug fentanyl across the border.
Mr. Trudeau has contended that Canada is not significantly contributing to either issue in the United States and labeled Donald Trump’s rationale regarding fentanyl as “completely false.”
When asked about Mr. Trump’s reasons for imposing tariffs, Mr. Trudeau remarked that the US president, who has frequently mentioned the idea of making Canada the 51st American state, “wants to see a collapse of the Canadian economy because that would facilitate our annexation.”
“The United States has declared a trade war on Canada,” Mr. Trudeau emphasized.
Canadians prepare for tariffs
We require your consent to load this comcast-player content. We utilize comcast-player to manage additional content that can set cookies on your device and gather data regarding your activity. Please review their information and accept them to load the content. Manage Preferences
“Canadians are reasonable. We are polite. We will not shy away from a challenge.”
Addressing Mr. Trump directly, Mr. Trudeau commented that although he considers Donald Trump a “smart guy,” the tariffs represent a “very foolish decision.”
Mr. Trudeau, who has been leading since 2015, is scheduled to be succeeded as the head of the governing Liberal Party on Sunday.
He has indicated that he will resign as prime minister once the party selects a new leader.
Mr. Trudeau has publicly attempted to address Mr. Trump’s concerns regarding migrants and fentanyl, aiming to avert the tariffs.
Canada has introduced a costly new border security initiative and appointed a fentanyl czar to spearhead efforts against this deadly opioid.
Mr. Trudeau stated that his priority remains to lift US tariffs “as swiftly as possible,” adding that he is still prepared to engage in direct discussions with Mr. Trump.
Mexican President Claudia Sheinbaum is expected to announce Mexico’s response on Sunday.
All three nations subjected to tariffs retaliate
Meanwhile, Mexican President Claudia Sheinbaum announced that she would unveil her country’s response to the measures on Sunday.
Global markets plummeted sharply in reaction to the escalating trade war, with the S&P 500 – a key Wall Street index – extending recent declines to wipe out all gains made since Mr. Trump’s US election victory in November.
Mr. Trump had initially announced – and subsequently paused – broad 25% tariffs on imports from major trading partners Canada and Mexico in February, accusing them of failing to curb illegal immigration and drug trafficking.
He proceeded with the tariffs today, citing no progress on either issue.
Read More: US tariffs: What’s been done and what is to come?
The sweeping tariffs will affect over $918 billion in US imports from both nations, impacting everything from avocados to the lumber essential for building US homes, and disrupting supply chains for critical sectors such as automobiles.
Mr. Trump also signed an order yesterday increasing a previously enacted 10% tariff on China to 20% – adding to existing levies on various Chinese products.
China condemned the “unilateral imposition of tariffs by the US,” filing a complaint with the World Trade Organization and threatening to levy 10% and 15% tariffs on a variety of agricultural imports from the United States.
The 20% tariff on Chinese goods will encompass smartphones and other products.
Analysts have cautioned that the increased import costs could elevate prices for consumers, complicating efforts to reduce inflation.
This includes grocery stores – Mexico provided 63% of US vegetable imports and nearly half of US fruit and nut imports in 2023, according to the US Department of Agriculture.
Housing expenses may also be affected. Over 70% of imports of two key materials necessary for homebuilders – softwood lumber and gypsum – come from Canada and Mexico, according to the National Association of Home Builders.
Truck drivers at the Otay Mesa border crossing in Mexico reported to AFP that they are already experiencing the effects, as waits to cross into the United States lengthen.
Work opportunities have dwindled because many companies in the Mexican border city of Tijuana export Chinese goods, noted driver Angel Cervantes.
Mr. Trump has initiated a security investigation into imports of wood products, which could lead to steep tariffs.
China announced that its tariffs against the United States will take effect next week, impacting tens of billions of dollars in imports, ranging from soybeans to chickens.
It stated that all imports of US lumber have been suspended and that soybean shipments from three American exporters have been halted, as the country’s foreign ministry pledged to combat the US trade war to the “bitter end.”
European Union trade spokesman Olof Gill warned that the tariffs imposed on Canada and Mexico jeopardize transatlantic “economic stability” and risk disrupting global trade, urging Washington to reverse its course.
The Tax Foundation estimates that, prior to accounting for foreign retaliation, the tariffs on Canada, Mexico, and China could reduce US economic output by 0.1% each.
“We could easily reach the highest effective tariff rate since 1936 by early 2026,” warned KPMG chief economist Diane Swonk ahead of the tariffs’ implementation.
Both consumers and manufacturers are expected to bear the burden of additional tariffs, which could decrease demand and lead to layoffs as businesses seek to manage costs, she added.
