Canada on Friday (Jan 17) issued a stark warning to the United States, promising that the nation would be hit with a "Trump tariffs tax" if US president-elect Donald Trump follows through on his plan to impose 25 per cent tariffs on Canadian imports.
Biggest trade war in decades
Foreign Minister Mélanie Joly pointed out this could be the most serious trade war between the two countries in decades.
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"This would be the biggest trade war between Canada and the US in decades," said Joly, adding, "The Americans would be starting a trade war against us."
Speaking at a press conference in Washington on Friday, Joly stressed that Canada is ready to defend its economy.
"We are ready to put maximum pressure," she stated, highlighting that Ottawa has a series of measures prepared if Trump carries out his tariff threat, and said that it would have a major impact on Canadian consumers and jobs.
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Donald Trump's proposed taxes on Canada
Trump, who is set to return to White House next week, has vowed to introduce steep 25 per cent tariffs on Canadian goods as part of his broader economic strategy targeting Mexico, China, and other trading partners.
In November, the US president-elect, while proposing the tariff, claimed it was necessary to curb drug trafficking and illegal migration across both borders.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” said Trump.
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In response, Canada is reportedly preparing tariffs of its own. News aganecy AFP, citing an anonymous government source reported that in the first phase of tariffs that could be extended, Canada was considering higher duties on goods from America including steel products, ceramics like toilets and sinks, glassware and orange juice.
Outgoing Prime Minister Justin Trudeau has vowed that Canada "will be strong and unequivocal in our defense of Canada and Canadians".
"The proposed tariffs would put American jobs at risk, raise prices for American consumers, put our collective security at risk and raise costs all across the continent."
Economists have sounded alarms over the potential economic fallout. A report from Scotiabank suggests a full-blown trade war could shrink Canada’s GDP by more than five per cent (5%), and lead to widespread job losses, and push inflation even higher.
(With inputs from agencies)