Tariff Tensions: Canada and U.S. on the Brink of Trade Clash

Canada is reconsidering retaliatory tariffs on U.S. products if Donald Trump's tariff threats materialize. A Canadian official has indicated preparations are ongoing, although no decisions are formalized. The potential tariffs echo past trade spats when Canada and other countries responded to U.S. tariffs on steel and aluminium.

The Canadian government is proactively preparing for potential trade friction with the U.S., should President-elect Donald Trump actualize his suggested tariffs on Canadian goods. According to a senior official, Canada is strategizing possible retaliatory tariffs, though no concrete decisions have been made.

This development mirrors earlier instances during Trump's tenure when international allies, including Canada, enacted retaliatory duties in response to U.S. tariffs. In 2018, Canada imposed tariffs on imports such as U.S. steel and aluminium. Items like yogurt from Wisconsin and whiskey from Kentucky faced duties, chosen for political resonance rather than economic heft.

These tariff threats are part of Trump's broader immigration and drug control policy enforcement strategy. While Trump highlights migration issues, data suggests the Canadian border sees considerably less migrant activity than the Mexican border. The economic interdependency between the U.S. and Canada underscores the repercussions of such tariffs, with Canada being a pivotal supplier of essential resources like oil, electricity, and vital minerals. Prime Minister Justin Trudeau is meeting with provincial leaders to discuss diverging strategies from Mexico.

(With inputs from agencies.)