ROB GILLIES
AP
Updated Tue, January 21, 2025
Canada Cabinet-Retreat
Canadian Prime Minister Justin Trudeau is joined by Minister of Finance Dominic LeBlanc, back left to right, Minister of Foreign Affairs Melanie Joly, Minister of Public Safety David McGuinty, as he holds a press conference during a cabinet retreat at Chateau Montebello in Montebello, Tuesday, Jan. 21, 2025.
Updated Tue, January 21, 2025
Canada Cabinet-Retreat
Canadian Prime Minister Justin Trudeau is joined by Minister of Finance Dominic LeBlanc, back left to right, Minister of Foreign Affairs Melanie Joly, Minister of Public Safety David McGuinty, as he holds a press conference during a cabinet retreat at Chateau Montebello in Montebello, Tuesday, Jan. 21, 2025.
(Sean Kilpatrick/The Canadian Press via AP)
TORONTO (AP) — Canada's outgoing prime minister and the leader of the country's oil rich province of Alberta are both confident Canada can avoid the 25% tariffs President Donald Trump says he will impose on Feb. 1.
Justin Trudeau and Danielle Smith will argue that Canada is the energy super power that has the oil and critical minerals that America needs to feed what Trump vows will be a booming U.S. economy.
But Doug Ford, the premier of Ontario, the manufacturing and automobile hub of Canada, said a trade war is 100% coming.
Trump "declared an economic war on Canada,” Ford said in an interview with The Associated Press. “And we are going to use every tool in our tool box to defend our economy.”
Trudeau said Canada will retaliate if needed but noted Canada has been here before during the first Trump presidency when they successfully renegotiated the free trade deal.
Ford said as soon as Trump applies tariffs he will instruct Ontario’s liquor control board to pull all American-made alcohol from shelves.
“We are the largest purchaser of alcohol in the world. And I'm going to encourage all the premiers to do the exact same,” Ford said, adding there will be a dollar-for-dollar tariff retaliation on American goods entering Canada.
“We are going to target Republican held areas as well. They are going to feel the pain. Canadians are going to feel the pain, but Americans will feel the pain as well," he said. “A message to the countries around the world: if he wants to use Canada as an example you are up next. He’s coming after you as well."
Trump pledged in his inaugural address that tariffs would be coming in a speech in which he promised a golden era for America. He later said Canada and Mexico could be hit with the tariffs as soon as Feb. 1, though he signed an executive order requesting a report coordinated by the Secretary of Commerce by April. 1.
Trump said Tuesday that the 25% tariffs that he intends to place on Canada and Mexico as soon as Feb. 1 would have “nothing to do” with renegotiating the existing trade pact among the three countries. For him, the tariffs are all about stopping unauthorized migration and the flow of any illicit drugs.
The U.S. president told reporters at the White House that, in his opinion, the amount of fentanyl coming through Canada and Mexico is “massive.”
U.S. customs agents seized just 43 pounds of fentanyl at the Canadian border last fiscal year, compared with 21,100 pounds at the Mexican border.
About 60% of U.S. crude oil imports are from Canada. Despite Trump’s claim that the U.S doesn’t need Canada, nearly a quarter of the oil America consumes per day comes from Canada. America’s northern neighbor also has 34 critical minerals and metals that the Pentagon is eager for and is also the largest foreign supplier of steel, aluminum and uranium to the U.S.
Nearly $3.6 billion Canadian dollars ($2.7 billion) worth of goods and services cross the border each day. Canada is the top export destination for 36 U.S. states.
“Trump wants to usher in a golden age for the U.S,” Trudeau said at a Cabinet retreat in Quebec called to deal with Trump's threats.
“If the American economy is going to see the boom that Donald Trump is predicting they are going to need more energy, more steel and aluminum, more critical minerals, more of the things that Canada sells to the United States every single day.”
On Tuesday, Mexico President Claudia Sheinbaum stressed the need to keep “cool heads” and look at the wording of what Trump signed, rather than listen to the discourse surrounding it.
On the threat of tariffs, Sheinbaum took solace in that the “ America First Trade Policy ” order that Trump signed Monday talks about the free trade agreement signed with Mexico and Canada during Trump’s first term, which lays out clear processes for disputes. She noted that a formal revision of the agreement is scheduled for July 2026
Justin Trudeau and Danielle Smith will argue that Canada is the energy super power that has the oil and critical minerals that America needs to feed what Trump vows will be a booming U.S. economy.
But Doug Ford, the premier of Ontario, the manufacturing and automobile hub of Canada, said a trade war is 100% coming.
Trump "declared an economic war on Canada,” Ford said in an interview with The Associated Press. “And we are going to use every tool in our tool box to defend our economy.”
Trudeau said Canada will retaliate if needed but noted Canada has been here before during the first Trump presidency when they successfully renegotiated the free trade deal.
Ford said as soon as Trump applies tariffs he will instruct Ontario’s liquor control board to pull all American-made alcohol from shelves.
“We are the largest purchaser of alcohol in the world. And I'm going to encourage all the premiers to do the exact same,” Ford said, adding there will be a dollar-for-dollar tariff retaliation on American goods entering Canada.
“We are going to target Republican held areas as well. They are going to feel the pain. Canadians are going to feel the pain, but Americans will feel the pain as well," he said. “A message to the countries around the world: if he wants to use Canada as an example you are up next. He’s coming after you as well."
Trump pledged in his inaugural address that tariffs would be coming in a speech in which he promised a golden era for America. He later said Canada and Mexico could be hit with the tariffs as soon as Feb. 1, though he signed an executive order requesting a report coordinated by the Secretary of Commerce by April. 1.
Trump said Tuesday that the 25% tariffs that he intends to place on Canada and Mexico as soon as Feb. 1 would have “nothing to do” with renegotiating the existing trade pact among the three countries. For him, the tariffs are all about stopping unauthorized migration and the flow of any illicit drugs.
The U.S. president told reporters at the White House that, in his opinion, the amount of fentanyl coming through Canada and Mexico is “massive.”
U.S. customs agents seized just 43 pounds of fentanyl at the Canadian border last fiscal year, compared with 21,100 pounds at the Mexican border.
About 60% of U.S. crude oil imports are from Canada. Despite Trump’s claim that the U.S doesn’t need Canada, nearly a quarter of the oil America consumes per day comes from Canada. America’s northern neighbor also has 34 critical minerals and metals that the Pentagon is eager for and is also the largest foreign supplier of steel, aluminum and uranium to the U.S.
Nearly $3.6 billion Canadian dollars ($2.7 billion) worth of goods and services cross the border each day. Canada is the top export destination for 36 U.S. states.
“Trump wants to usher in a golden age for the U.S,” Trudeau said at a Cabinet retreat in Quebec called to deal with Trump's threats.
“If the American economy is going to see the boom that Donald Trump is predicting they are going to need more energy, more steel and aluminum, more critical minerals, more of the things that Canada sells to the United States every single day.”
On Tuesday, Mexico President Claudia Sheinbaum stressed the need to keep “cool heads” and look at the wording of what Trump signed, rather than listen to the discourse surrounding it.
On the threat of tariffs, Sheinbaum took solace in that the “ America First Trade Policy ” order that Trump signed Monday talks about the free trade agreement signed with Mexico and Canada during Trump’s first term, which lays out clear processes for disputes. She noted that a formal revision of the agreement is scheduled for July 2026
Smith, the premier of Canada's oil rich province of Alberta, said the April 1 deadline gives Canadians time to make case to the Trump administration that Canada should be exempted from tariffs.
“With the energy emergency that they declared and with their desire for critical minerals Canada is the answer,” Smith told the AP. Canada can get a “total carve out" from the tariffs, she said.
Smith noted Canada is the world's biggest supplier of uranium and an important source of critical minerals that the U.S. is desperate for. She said both Canadians and Americans would be harmed by a trade war but said Canadians can't afford it in particular.
“We have to be realistic. We are talking about a $21 trillion economy and the amount of product that we sell into the United States is somewhere in the order of $300 billion," Smith said.
"We don’t have the same kind of market power that they do as an economy. We are one 10th their size. We have to be realistic about what a trade and tariff war looks like. We would be more harmed by that than them."
Smith said Americans in some states could pay more than a dollar per gallon more for gas.
“Americans will pay more in the states that are reliant on Canadian goods and Canadians will just pay more in return,” Smith said.
___
Associated Press writer María Verza in Mexico City and AP writer Joshua Boak in Washington contributed to this report.
Trudeau says Canada is ready to respond to possible Trump tariffs
Reuters
Tue, January 21, 2025
Canada's PM Trudeau holds events in Ontario
TORONTO (Reuters) -Canadian Prime Minister Justin Trudeau reiterated on Tuesday that his government is ready to respond to all scenarios if U.S. President Donald Trump imposes tariffs on Canada.
Asked about an uncertain timeline on possible tariffs, Trudeau said Trump is a skilled negotiator who likes to keep his negotiating partners a bit off-balance.
Trump is expected to sign more executive orders on his second day in office. On Monday he suggested across-the-board tariffs on Mexican and Canadian exports to the United States could take effect beginning in February.
"Donald Trump's approach does bring in uncertainty," Trudeau said, adding that he speaks "regularly" with Trump.
"As regards next formal interactions, stay tuned."
Trudeau said Trump's promised prosperity for America will require Canadian resources to fuel it.
"Canada provides many of the necessary inputs the American economy is going to need in order to grow and boom."
(Reporting by Caroline Stauffer and Anna Mehler Paperny)
Trudeau promises 'very strong' response as Trump renews tariffs threat against Canada
CBC
Tue, January 21, 2025
Prime Minister Justin Trudeau says 'dollar for dollar' retaliatory tariffs are on the table. (Sean Kilpatrick/The Canadian Press - image credit)
Prime Minister Justin Trudeau said Tuesday Canada will hit back at the U.S. if President Donald Trump goes ahead with punishing tariffs on Feb. 1, promising this country will respond in kind with "robust, rapid" and "very strong" retaliatory measures.
Trudeau said Canada is ready to deploy whatever measures are necessary to try and force Trump to reverse course. He even floated slapping dollar-for-dollar matching tariffs on American products if the U.S. enacts its promised tariff scheme — a program that could result in levies on hundreds of billions of dollars of American imports.
The comments come after a chaotic day for the Canada-U.S. trade relationship.
After his inauguration, Trump held off issuing an executive order to levy tariffs on Canada, only to suggest later in the day he wants a 25 per cent tariff in place in two weeks' time.
Then, he signed a new "America first" trade policy that directs officials to study unlawful migration and fentanyl flows from Canada and other countries and report back by April 1 on possible trade action to resolve what that policy calls an "emergency."
Trudeau told reporters at a special cabinet meeting in Montebello, Que., he was unfazed by Trump's about-face, saying he's come to expect a great deal of "uncertainty" when dealing with this president.
"We've been here before," he said.
Trudeau said Trump is a skilled negotiator and he will "do what he can to keep his negotiating partners a little off balance."
But Canada is a good negotiator, too, Trudeau said, and it's willing to inflict economic pain on the U.S. to get Trump to back down.
While Canada's priority is to avoid the tariffs altogether and foster "a very positive relationship with the U.S.," the country won't roll over in the face of Trump's threats, Trudeau said.
Canada has leverage, says Trudeau
Despite Trump's rhetoric that he doesn't need anything from Canada, Trudeau said if Trump really wants to usher in a "golden age of America" with a booming economy, he's going to need Canadian natural resources like oil, lumber, steel, aluminum and critical minerals to make that happen.
That gives Canada some leverage, Trudeau said.
s say:
A 25 per cent tariff would be particularly devastating to Canada. Experts have said just a 10 per cent levy would shave billions of dollars off the GDP and potentially plunge the country into a painful recession requiring government stimulus to prop up the economy.
Trudeau floats dollar-for-dollar matching tariffs
Officials have already drawn up a plan that will levy immediate tariffs on $37 billion worth of American goods if Trump moves against Canada — rising to $110 billion if the president doesn't back down.
Ottawa is also prepared to enact some more severe measures, including a possible oil export ban, if those earlier efforts don't succeed.
Trudeau said on Monday that his government could go even further with its retaliatory tariffs, if necessary.
"Everything is on the table, and I support the principle of dollar-for-dollar matching tariffs," Trudeau said.
"It's something we're absolutely going to be looking at if they move forward," Trudeau said of the Americans. "We are prepared for every possible scenario."
Liberal leadership contenders Chrystia Freeland and Mark Carney have also endorsed dollar-for-dollar tariffs to punish Trump if he takes a swipe at Canada.
"Dollar-for-dollar retaliatory tariffs by Canada should be a given and they should be aimed where their impacts in the United States will be felt the hardest. Every dollar raised by Canadian tariffs should be used to help support Canadian workers through this fight," Carney said in a statement.
Warning to Canadians
Trudeau warned there will be costs borne by consumers if Canada goes into a trade war to stop Trump from torpedoing the economy. Retaliatory tariffs could push up the price of the many things Canadians buy from the U.S.
"If and when Canada needs to respond with the equivalent tariffs on imports from the U.S., those would be paid by Canadian consumers," he said.
Trudeau said there will be government support to help workers and businesses weather the storm — and he urged people to buy Canadian goods wherever possible to avoid the worst of the potential cost increases.
Trump is threatening these tariffs because he claims Canada is sending drugs and migrants into the U.S.
Speaking late Monday, Trump said Canada is "a very bad abuser" when it comes to the border and his prescribed trade policies will help fix the situation.
Experts say there's a reason why Trump is framing the expected tariffs as a response to an "emergency" drug and migrant crisis — it gives him the leeway to impose tariffs even though the new NAFTA is in place to prevent exactly that sort of trade action.
Trump can claim he's levying tariffs to address national security concerns, thereby unlocking special trade powers that can help usurp a free-trade deal, experts say.
Ottawa has shown a willingness to engage with Trump on the border issue, already announcing a $1.3-billion border package that will result in more personnel and technology to better police the 49th parallel.
Canada also has data on its side.
Figures from U.S. Customs and Border Protection show the agency seized just 19.5 kilograms of fentanyl at the northern border last year, compared to a whopping 9,570 kilograms at the southwestern one.
As for illegal migrants, there's also a huge disparity between Canada and Mexico.
Alberta seeks diplomatic resolution
Still, Alberta Premier Danielle Smith said Ottawa should take Trump's concerns seriously and try to pursue some sort of diplomatic resolution to this trade conflict, and focus on delivering more border measures to appease the new president.
Speaking to reporters from Washington, where she attended inauguration events over the last two days, Smith said she doesn't think retaliatory tariffs will work against Trump. Canada needs to be focused on creating a "win-win" scenario that involves giving the president more of what he wants to get him to back down, she said.
"We do have to be realistic. We're an economy that's one-tenth the size of the Americans'. We are far more reliant on the trade relationship with them than they are with us, so trying for a tit-for-tat tariff war without addressing the underlying issues is not going to end well for Canada," she said.
That puts Smith offside with Conservative Leader Pierre Poilievre who said on Tuesday he supports some unspecified retaliatory tariffs against Trump for his "unjustified 25 per cent tariffs."
Poilievre urged Trudeau to reconvene Parliament right away so that MPs and senators can pass legislation to strengthen the border and "agree on trade retaliation and prepare a plan to rescue Canada's weak economy."
Under Canadian trade law, the government can impose retaliatory tariffs on the U.S. without Parliament's approval.
But Poilievre said MPs should have a say.
"Open Parliament. Take back control. Put Canada First," he said.
Canada will ‘respond robustly’ if Trump imposes ‘unfair tariffs,’ says PM Trudeau
Eve Brennan, CNN
Tue, January 21, 2025
Canadian Prime Minister Justin Trudeau holds a press conference on January 21, 2025. (Sean Kilpatrick/The Canadian Press/AP)
Canada’s Prime Minister Justin Trudeau said his country will respond “robustly” if US President Donald Trump follows through with imposing tariffs on Canada, telling reporters on Tuesday that “everything is on the table.”
“If there are unfair tariffs, we will respond robustly and we will be there to support Canadians and protect our interests,” Trudeau said at the press conference in French when responding to a journalist’s question.
Trump said in an Oval Office signing ceremony Monday evening that his administration will impose a 25% tax on goods from Canada and Mexico that may come as soon as February 1 – a move that could raise prices for American consumers.
Trudeau also addressed Trump’s executive action, signed Monday, that directs officials to analyze how the US-Mexico-Canada trade agreement (the USMCA) is affecting American workers and businesses — and whether America should remain in the free trade agreement. His action requires agencies to assess whether stricter US trade policy could successfully restrict the flow of fentanyl and the flow of undocumented migrants into the United States.
“While less than 1% of fentanyl and illegal immigrants that enter the United States come from Canada, our government has already acted to address the concerns raised by the president about border security with an over $1 billion comprehensive border plan,” said Trudeau. “We’re already working collaboratively to keep our citizens safe on both sides of the border.”
“Canadian energy powers American manufacturing, businesses, and homes. Of America’s top five trading partners, Canada is the only one with whom the United States runs a trade surplus in manufacturing, and Canada buys more goods made by Americans than China, Japan and Germany combined,” he said.
Trudeau remarked that Trump’s stated US “golden age” would require more steel, aluminum, minerals and reliable and affordable energy. “Canada has all those resources, and we stand at the ready to work with the United States to create a booming and secure North American economy,” he said.
“The alternative for them would be more resources from Russia, China, or Venezuela. Canada is a safe, secure, and reliable partner in an uncertain world,” he added.
The tariffs, if enacted, could strain Americans’ wallets, especially given Mexico and Canada are two of America’s top three trade partners. Collectively, they accounted for 30% of the value of all the goods the US imported last year, according to federal trade data.
While Trump claims foreign exporters pay the tariffs, US consumers stand to foot a portion of the bill, too, as retailers are unlikely to fully absorb the added costs.
CNN’s Elisabeth Buchwald, Kayla Tausche, Kevin Liptak and David Goldman contributed to this report.
Canadian Oil Rallies on Signs Trump Will Hold Off on Tariffs
Robert Tuttle
Mon, January 20, 2025
(Bloomberg) -- Canadian oil prices rallied on signs US President-elect Donald Trump won’t immediately impose tariffs on the country’s crude.
Western Canadian Select crude for delivery in the second quarter traded at $14 a barrel less than US benchmark West Texas Intermediate oil on Monday, a smaller discount than the $16-a-barrel gap on Friday, according to a person familiar with prices. The discount on WCS for March delivery narrowed to $12.90 a barrel from $14.75.
Trump won’t institute tariffs on his first day, but will instead call for federal agencies to study tariff policies and the US’s trade relationships with China, Canada and Mexico, according to incoming officials for the Trump White House. Trade duties could be imposed later, in the coming weeks or months.
Canadian crude prices weakened last week after Alberta Premier Danielle Smith warned Canadians to prepare for tariffs on all of the country’s exports to the US, including oil, after meeting with Trump in Florida.
Light Canadian crudes also showed signs of rebounding. The discount on mixed sweet crude for March delivery narrowed to $4.50 a barrel, from $7.50.
Bloomberg Businessweek
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