Canada, the largest buyer of American goods and the third-largest exporter to the United States in 2022, faces a potential trade conflict as former President Donald Trump threatens to impose a 25% blanket tariff on all Canadian exports. The situation echoes the tariff tensions during Trump's first term when the U.S. placed levies on Canadian steel and aluminum exports. In response, Canada's minister of international trade, Mary Ng, stated that Ottawa is ready to retaliate, with "everything on the table," including potential tariffs on U.S. goods and military equipment.
Ng emphasized the potential economic impact of such tariffs, suggesting that prices for everyday items could rise for American consumers.
"You can pretty much be sure that if you're buying something [at a] supermarket… think about a candy bar. There's probably some Canadian in there. So if you're paying $4 today, you might be paying $5 tomorrow," – Mary Ng.
Ng also highlighted that tariffs on Canadian exports would likely lead to increased costs for Americans.
"If you're going to put tariffs on Canada, what it actually will do is make things more expensive for Americans," – Mary Ng.
In anticipation of escalating tensions, Ottawa is preparing a list of U.S. exports that could face additional tariffs, potentially targeting the energy sector. Given that seventy percent of Canada's military hardware is sourced from the U.S., the stakes are high for both nations. However, Ng stressed that Canada seeks to find common ground to avoid escalation, acknowledging the unparalleled trade relationship between the two countries.
"I think we have a very unique opportunity right now for Canada and the United States to build an even stronger economy, a stronger North American economy, by working together," – Mary Ng.
The U.S. remains Canada's largest trading partner, accounting for approximately 75% of its trade. Despite this close relationship, tensions are mounting amid Canada's internal political changes following Prime Minister Justin Trudeau's resignation and the departure of former deputy prime minister Chrystia Freeland.
In light of these developments, Ng reaffirmed Ottawa's commitment to securing the border and enhancing collaboration with the U.S., including increased purchases from American businesses to stimulate trade and economic growth. She also pointed out Canada's critical role in supplying energy to the U.S., noting that many American cities rely on Canadian electricity.
"I don't actually think Americans want us to not be selling electricity, oil and gas to America, because you know, I'm here in New York, the lights on Broadway, lots of it is Canadian electricity," – Mary Ng.
The looming threat of a trade war has prompted Ottawa to expand its engagement with other global trade partners, such as Japan and the European Union. This strategic move aims to diversify Canada's trade relationships and mitigate potential impacts from any disruptions with the U.S.