Trudeau warns of higher consumer costs if Trump imposes tariffs on Canadian goods

Canada poised to respond to tariff threats

“If President Trump decides to apply these tariffs—whether on February 1, February 15 as a Valentine’s Day gift, or any other date—Canada will respond with retaliatory measures,” Trudeau said, according to news agency The Associated Press. “And prices for American consumers on nearly everything will rise. We don’t believe he wants that.”

Trump, who had earlier told reporters in the Oval Office that he intends to move forward with a 25 percent tariff on Canadian and Mexican imports, could implement the tariffs as early as February.

The Canadian leader cautioned that targeting one of America’s largest trading partners could have far-reaching consequences for industries such as oil, lumber, and automobiles—sectors critical to both economies.

Impact on oil and fuel prices

Danielle Smith, Premier of Alberta, echoed Trudeau’s concerns, warning that tariffs on Canadian oil could significantly raise fuel prices in the US. “In some states, Americans could pay over a dollar more per gallon for gas,” she said, as reported by the AP.

The US imports a substantial amount of oil from Canada, with nearly 25 percent of its daily consumption coming from its northern neighbour. This relationship makes Canada a key supplier of critical resources to the US economy.

Economic ties between US and Canada

Despite Trump’s assertions that the US does not rely heavily on Canadian goods, Trudeau highlighted the intertwined nature of the two economies. Canada is the largest foreign supplier of steel, aluminium, uranium, and 34 critical minerals to the US economy.

“The US should be working more closely with Canada on energy, critical minerals, and the goods needed for the economic growth President Trump has promised,” Trudeau said. “That is our preference. But if tariffs are imposed, we are prepared to respond strongly and work to remove them as soon as possible.”

Potential Canadian retaliation

In response to the looming tariffs, Canada is reportedly considering retaliatory measures that could include levies on US exports such as orange juice, toilets, and certain steel goods. Trudeau pointed to Canada’s previous retaliation during Trump’s first term, which involved billions of dollars in duties on US goods.

“Everything is on the table,” Trudeau said. “This would be bad for Canada, but it would also be bad for American consumers.”

Economic tensions over trade deficit claims

Canada is the top export destination for 36 US states, with more than $2.7 billion worth of goods and services crossing the border each day. However, Trump has repeatedly criticized the trade relationship, often claiming that the US runs a $200 billion trade deficit with Canada.

“We’re not going to have that anymore,” Trump said during a recent appearance at the World Economic Forum. He even suggested that Canada could avoid tariffs by becoming a US state. “If you’re a state, there’s no deficit, and we wouldn’t need to tariff you,” Trump remarked.

Trudeau disputes Trump’s concerns

In his remarks, Trudeau also addressed Trump’s focus on border security, countering claims that drugs and migrants are entering the US from Canada in large numbers. “Less than one percent of illegal drugs and migrants entering the US come from Canada,” Trudeau said. He noted that Canada has nevertheless committed over a billion dollars to enhance border security.

Emphasizing collaboration

As tensions over trade simmer, Trudeau emphasized the importance of collaboration between the US and Canada. Both economies are deeply interconnected, and any disruption — such as the imposition of broad tariffs — could have significant consequences for businesses and consumers on both sides of the border.

“We are prepared to work with the United States to remove any barriers to trade, but conflict over tariffs is not the path forward,” Trudeau said.