Mr. Justin Trudeau, the Prime Minister of Canada, has reportedly stated that Ottawa will respond with its own tariffs if President-elect Donald Trump implements his pledge to impose a 25% tariff on Canadian imports.
Trump announced late last month that he would impose a 25% tariff on imports from Canada and Mexico unless the countries took additional measures to prevent the flow of illegal narcotics and migrants across the border into the United States.
Not long thereafter, Trudeau convened with Trump at his exclusive Florida club.
Trudeau and Trump engaged in a conversation regarding the frontier and trade during their dinner.
Trudeau made a complaint regarding the tariffs’ potential impact on Canada’s economy, as per attendees at the dinner.
Trump intervened, asserting that Canada could become the 51st state of the United States if the Canadian leader did not approve.
In 2018, the Trump administration implemented tariffs on imported steel and aluminum, which encompassed imports from Canada.
In response, the Trudeau government implemented targeted tariffs on specific U.S.-made products to exert pressure on members of Congress from critical U.S. states.
Some of the products were bourbon from Kentucky, motorcycles manufactured at Harley-Davidson factories in Wisconsin, and ketchup produced in Pennsylvania.
According to the most recent data from the U.S. commerce Representative, the United States and Canada maintain one of the most extensive trading partnerships in the world, with an annual two-way commerce of nearly $1 trillion.
Economists caution that a 25% tariff would likely precipitate a recession in Canada, as nearly seventy percent of all Canadian exports are directed toward the United States.
Oxford Economics, a forecasting firm, has determined that the 25% tariff, in conjunction with retaliatory duties from Ottawa, would result in a recession in Canada.
Oxford Economics predicts that business investment will decrease by 7% and nonenergy exports will decrease by 2.9% between early 2025 and mid-2026, as indicated by its modeling.
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