In a significant escalation in trade tensions between the United States and Canada, Canadian Prime Minister Justin Trudeau has declared retaliatory tariffs against a broad spectrum of U.S. goods starting Tuesday.
Fox Business reported that following the recent U.S. announcement of tariffs on Canadian imports, Canada has responded with its own set of tariffs and other countermeasures.
President Donald Trump's administration imposed a 25% tariff on Canadian imports effective last Saturday, targeting a wide range of goods.
This move has been linked by the White House to concerns over illegal immigration and drug trafficking, specifically pointing to fentanyl.
In response to U.S. actions, Trudeau announced that Canada would impose equivalent 25% duties on about $21 billion worth of American goods starting this Tuesday, with further plans to apply an additional $86 billion in tariffs within the next 21 days.
The targeted U.S. products include beverages like beer and bourbon, various food items, clothing, and more.
Further straining the trade relationship, the Canadian Prime Minister also mentioned non-tariff barriers, which will include restrictions on exports of critical minerals and energy resources, as well as changes to government procurement policies.
This strategy, according to Trudeau, aims to unite Canadians behind domestically produced goods, urging citizens to choose local products like Canadian rye over Kentucky bourbon or to avoid Florida orange juice entirely.
While the White House has connected the imposition of tariffs to drug trafficking issues, it's important to note that during the fiscal year 2024, only 43 pounds of fentanyl were seized at the U.S.-Canada border, a miniscule amount compared to the 21,100 pounds seized at the U.S.-Mexico border.
Despite this discrepancy, Trump emphasized the significance of the lesser quantity from Canada due to its potent danger.
Last December, Canada revealed a substantial $895 million plan to enhance border security and specifically address the fentanyl trade, showcasing its commitment to tackling these issues head-on.
Political leaders across Canada have voiced their support for Trudeau’s tough stance. Conservative Leader Pierre Poilievre advocated for "dollar-for-dollar tariffs" aimed at maximizing impact on U.S. companies while preserving Canadian consumer interests.
Ontario Premier Doug Ford emphasized that Canada "has no choice but to hit back hard," describing the upcoming period as "incredibly difficult."
In British Columbia, Premier David Eby took direct action by ordering the removal of popular U.S. liquors from state-run stores to protest the tariffs.
Public reactions have been strongly against the U.S. tariffs, with instances like the U.S. national anthem being booed at a hockey game in Ottawa. NDP Member of Parliament Charlie Angus noted that the issue is unifying Canadians across different sectors, and he described the tariffs as "unprecedented" and "brutally devastating" for both nations.
Analyses by financial institutions and economic experts predict severe repercussions due to the tariffs. TD Economics highlighted that goods and services valued at $683 billion crossed the Canada-U.S. border in just the first three quarters of 2024, illustrating the magnitude of the potential impact.
Similarly, the Canadian Chamber of Commerce estimated significant contractions in GDP for both countries, with the U.S. potentially seeing a 1.6% reduction and Canada a 2.6% decrease.