LDN - Business

Trudeau says Canada will respond to US tariffs as Ontario's premier says Trump 'declared war'

[January 22, 2025] By ROB GILLIES

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.

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Ontario Premier Doug Ford, wearing a 'Canada Is Not For Sale' hat, speaks as he arrives for a first ministers meeting in Ottawa, Jan. 15, 2025. (Justin Tang/The Canadian Press via AP, File)

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.

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Associated Press writer María Verza in Mexico City and AP writer Joshua Boak in Washington contributed to this report.

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