Canadian government ready to hit back at US president Donald Trump’s trade tariffs
The Canadian government will hit back at US President Donald Trump’s trade tariffs with retaliatory tariffs of their own, supported by the new Canada US Relations Council, say leading audit, tax and business advisory firm, Blick Rothenberg.
Melissa Thomas, head of Canada Desk at the firm, said: “While in the Oval Office on Monday, Donald Trump announced he could enact tariffs of up to 25% with both Mexico and Canada, across all goods, as soon as February 1st. But the Canadian government has been clear they will not sit back and let this be a one-way strike. They intend on hitting back.”
She added: “On 16 January the Canadian prime minister, Justin Trudeau, assembled a new Canada US Relations Council to support the Canadian Federal government as it prepares to deal with the threat of tariffs imposed by the US.”
Melissa said: “The Canada US Relations Council comprises 18 representatives from tariff vulnerable sectors within Canada such as automotive, industry and agriculture which are highly reliant upon exports to the US. The council also includes experienced heavyweights Steve Verheul, Canada’s chief trade negotiator during the renegotiation of NAFTA, Canada’s Ambassador to the US, Kirsten Hillman and former ambassador David MacNaughton and Jody Thomas, Trudeau’s former national security advisor.”
She added: “The creation of such an imposing and experienced council demonstrates that Trudeau, while on his way out of government by March 2025, is taking Donald Trump’s tariffs seriously.”
Melissa said: “The Canadian government has already identified potential counter tariffs on CAN$37bn of goods, referred to by Melanie Joly the Canadian foreign minister as a ‘Trump tariff tax’ for US businesses and consumers, that could be imposed quickly and could be consulted on for an expedited period of 15 to 30 days.”
She added: “These initial counter tariffs, the government have advised, would be less harmful to the Canadian economy than the further CAN$110bn of second-round retaliatory tariffs which the Canadian government are also considering. The launch of this second round of tariffs would depend upon Donald Trump’s administration’s actions. Details on exact industries which are included in the first and second round counter tariffs are yet to be shared.”
Melissa said: “Roughly 75% of Canadian exports go across the border to the US. The largest Canadian export sector to the US is the Mineral fuels, oils and distillation products, which are centred around Alberta. The auto manufacturing sector is also heavily reliant upon US exports. In addition, the Canadian lumber industry is heavily reliant upon US trade with 85% of exported Canadian wood products going to the US.”
She added: “One of the candidates for Canadian prime minister is Mark Carney, the former Bank of England Governor. He has publicly stated in his campaign speech last week that he will ‘stand up for Canada against Donald Trump.’ He was born in Canada’s North West Territories and grew up in Edmonton, Alberta, home to Canada’s vibrant Oil and Gas sector which will be hit hard by Donald Trump’s proposed tariffs.”
Melissa said: “Another candidate, the former deputy PM Chrystia Freeland, has also voiced her concerns over Trudeau’s weak handling of the initial threats from Donald Trump in relation to imposing US tariffs on Canadian goods. She has already rattled Donald Trump who has publicly called her ‘toxic’, so is not expected to take a step back in defending Canada against Donald Trump’s tariffs.”
She added: “Regardless of who becomes the next Canadian prime minister it is clear that Donald Trump’s tactics of using tariffs as a threat to get what he wants will not work with Canada.”