The Canadian government is crafting strategies to counter potential U.S. tariffs after President-elect Donald Trump renewed threats of heavy taxes on imports from Canada and Mexico. Trump has pledged to impose a 25% tariff on goods entering the U.S., tying the move to his efforts to address migration and drug trafficking issues on both borders.
Canada Plans Retaliatory Measures
Officials in Canada are exploring targeted tariffs on U.S. products should Trump’s proposals take effect. While no final steps have been decided, preparations are underway to respond firmly. This approach echoes Canada’s actions in 2018, when it imposed billions in retaliatory duties after Trump raised tariffs on Canadian steel and aluminum. Back then, Canada strategically targeted goods like Wisconsin-produced yogurt and Kentucky bourbon to maximize political impact.
Canadian leaders argue that comparing their border situation to Mexico’s is unjustified. U.S. Border Patrol recorded 23,721 arrests at the northern border one between October 2023 and September 2024, a stark contrast to the 56,530 apprehensions at the Mexican border in October alone. Similarly, drug trafficking data highlights the disparity: only 43 pounds of fentanyl were seized at the Canadian border last fiscal year, compared to over 21,000 pounds at the southern border.
Despite these figures, Canadian officials have signaled willingness to enhance border security and collaborate with the U.S. to address migration concerns.
Economic Ties at Risk
Canada is the leading export destination for 36 U.S. states, with goods and services worth $3.6 billion Canadian (US$2.7 billion) crossing the border daily. The economic relationship extends to critical resources, as Canada provides most of the U.S.’s imported crude oil, electricity, steel, aluminum, and uranium. Any disruptions caused by tariffs could have significant consequences on both sides.
Prime Minister Justin Trudeau convened provincial leaders for an emergency meeting to ensure a coordinated response. Deputy Prime Minister Chrystia Freeland underscored the need for unity, urging provincial leaders to avoid internal disputes and focus on the external challenges posed by U.S. policy changes.
Provinces have also floated the idea of a bilateral trade agreement with the U.S. that excludes Mexico, reflecting a growing divide in how Canada views its relationship with its southern neighbor under these circumstances.
Mexico’s Role in the Debate
Meanwhile, Mexican President Claudia Sheinbaum has also prepared a list of potential tariffs but noted progress in discussions with Trump. She pledged immediate action to curb migration through Mexico, expressing optimism after a direct conversation with the U.S. president-elect.
As tensions rise, Canada and Mexico are preparing to defend their economic interests while navigating an increasingly complex relationship with the Trump administration.
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