Should Canada retaliate if Trump makes good on 25 per cent tariff threat?

After U.S. president-elect Donald Trump threatened to impose a 25 per cent tariff on all Canadian imports on his first day back in the White House unless his border concerns are addressed, there is mixed reaction on whether Canada should retaliate.

After U.S. president-elect Donald Trump threatened to impose a 25 per cent tariff on all Canadian imports on his first day back in the White House unless his border concerns are addressed, there is mixed reaction on whether Canada should retaliate.

In a post to Truth Social on Monday night, Trump said the tariff “will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

The U.S. is Canada’s largest trading partner, and the potential tariff is sparking new concerns over the economic impact it could have on jobs, inflation and supply chains.

Speaking to reporters in Ottawa on Tuesday, Deputy Prime Minister and Finance Minister Chrystia Freeland was asked directly about potential retaliation if Trump makes good on his threat but would not answer directly. Instead, she pointed to the federal government’s previous experience with tariffs under Trump’s first term.

“We reached an agreement with the Trump administration to have those tariffs lifted, to have the Canadian tariffs on the U.S. lifted, to have the U.S. tariffs on Canada lifted,” Freeland said. “And the reason we were able to do that is we were smart, we were united, we were strong.”

During his first term as U.S. president in 2018, Trump triggered a nearly year-long trade war with Canada after imposing a 25 per cent tariff on Canadian steel products and 10 per cent on Canadian aluminum. In response, Canada unveiled a 25 per cent counter tariff on a long list of American steel and aluminum products, along with a 10 per cent surtax on miscellaneous U.S. goods including coffee, prepared meals and maple syrup. Those retaliatory tariffs were eventually lifted in 2019 after Canada, the U.S. and Mexico reached a deal.

Then, in August 2020, Trump once again announced plans to impose a 10 per cent tariff on Canadian aluminum. In a statement at the time, Freeland said “Canada intends to swiftly impose dollar-for-dollar countermeasures,” but one month later, Trump hit pause on those tariffs amid the looming presidential election later that year. Trump went on to lose that election to Joe Biden.