Canadian political leaders have asserted that "nothing is off the table" as they prepare to respond to potential 25% tariffs threatened by the United States. The proposed tariffs, which could be imposed by the Trump administration, pose a significant threat to Canada's economy and national security. With approximately 75% of Canadian exports destined for the US, the potential economic impact could be devastating.
The tariffs could undermine national security due to Canada's crucial role as a provider of energy and critical minerals to its southern neighbor. Economists warn that if a blanket 25% levy is applied to all Canadian goods, Canada's GDP could suffer a significant blow, with potential losses ranging from 1.8% to 3.38%. In contrast, the US GDP might experience a pinch between 0.9% and 1.6%.
Prime Minister Justin Trudeau emphasized the need for a unified response, stating:
"What we've agreed on is we have to respond to the challenge we're facing and that the burden is shared across the country." – Justin Trudeau
Canada is preparing various countermeasures in anticipation of the tariffs, whether they come as a blanket 25% levy or a more targeted approach. Ottawa has pledged C$1.3 billion ($900 million; £700 million) in new security measures along the nearly 9,000 km-long (6,000 mile) border with the US. This move comes as Canadian legislators make personal visits to US counterparts, including trips to President-elect Donald Trump's Mar-a-Lago resort in Florida, in an attempt to avert the tariffs.
Alberta faces the potential loss of 50,000 jobs, while Ontario Premier Doug Ford suggests up to 500,000 jobs could be at risk in his province if the tariffs are enacted. The expected tariff confrontation coincides with domestic political challenges in Canada, including an election that may take place as early as this spring. Additionally, Prime Minister Trudeau plans to step down once his Liberal Party selects a new leader in March.
President-elect Trump has threatened to impose immediate levies on Canadian goods as part of his effort to curb illegal immigration and drug smuggling into the US. Trump has long championed trade tariffs, describing them as the "greatest thing ever invented."
Andrew Furey, a key figure in Canadian energy policy, highlighted Canada's strategic position:
"I see energy as Canada's queen in this game of chess." – Andrew Furey
He elaborated on Canada's approach by stating:
"We don't need to expose our queen too early. The opposition does need to know the queen exists but they don't need to know what we do with the queen." – Andrew Furey
The proposed tariffs hold particular significance for Canada's energy sector. Around 40% of the crude oil processed in US refineries is imported from Canada, underscoring the intertwined nature of the two countries' economies.
Trudeau reiterated Canada's resolve:
"We will stand up for Canada, we will protect Canadians." – Justin Trudeau
Danielle Smith, representing Alberta's interests, also affirmed her commitment:
"We will take whatever actions are needed to protect the livelihoods of Albertans from such destructive federal policies." – Danielle Smith
Canadian leadership remains steadfast in its determination to respond robustly:
"We're all united in that we have to act in the robust way." – Justin Trudeau