In a climate of growing tensions, Canadian leaders find themselves pondering their options. With potential 25% tariffs from the United States looming, the stakes are undeniably high. At the heart of the matter lies President-elect Donald Trump, who seems determined to enforce levies immediately, aiming to tighten Canada’s grip on issues like illegal immigration and drug smuggling.
Our Prime Minister, Mr. Justin Trudeau, has boldly declared that “nothing is off the table.” Following his meeting with provincial and territorial premiers, he conveyed a unified front, ensuring that any challenge would be met with shared resolve across the vast Canadian landscape. In a bid to determine the nation’s strategy, Trudeau, alongside Ontario, Quebec, and Newfoundland premiers, discussed potentially employing counter-tariffs on energy or even limiting energy exports to the US.
In recent weeks, Canadian legislators have made personal pilgrimages to Trump’s Mar-a-Lago resort, attempting to stave off what seems to be an impending trade conflict. The notion of imposing tariffs resonates as a core component of Trump’s vision to bolster the American economy. However, such measures may prove quite counterproductive.
To put it into perspective, allow me to introduce a bit of the arithmetic involved. Canada’s GDP could face an adverse impact ranging from 1.8% to 3.38% with a possible 25% tariff, while the US might observe a pinch of around 0.9% to 1.6%. The ramifications extend beyond mere percentages, with Premier Doug Ford cautioning about job losses potentially reaching 500,000 in Ontario—a veritable hub of the nation’s auto sector.
It should not be surprising, then, that Trudeau has assured the public of definite support for sectors particularly hit by these tariffs. Interestingly, around 75% of Canadian exports are US-bound, making the American market a vital recipient of our goods. With trade corridors threatened, the provinces’ apprehensions seem well-founded. Alberta Premier Danielle Smith, for one, has taken to social media to express her dissent towards federal policies perceived as detrimental. She notably refrained from endorsing the joint statement issued after Wednesday’s meeting, signalling the pressures simmering within the coalition. Earlier remarks by [Newfoundland’s Premier Andrew Furey in](https://www.bbc.com/news/world-us-canada-38669884) which, he likened Canada’s energy assets to a chess queen, hint at the strategic positions Canada may leverage in this unfolding geopolitical dance.
Then there’s the matter of energy. Approximately 40% of the crude coursing through US refineries stems from Canadian soil, a lifeline extended across the border along with supplies of natural gas and electricity. With Trump steadfast on his tariffs, these resources could well emerge as instruments of countermeasures. But quoting Drew Fagan from the University of Toronto’s Munk School of Global Affairs and Public Policy, achieving strategic finesse with an unpredictable administration can be “tricky”.
The context is no less internal. Trudeau himself is amidst political turbulence, planning to relinquish his role later this year. An election is anticipated in the near future, possibly as soon as spring, which puts added pressure on the present dispensation. It’s a curious picture painted on the Canadian political canvas, one that demands we heed evolving developments keenly.
For further insight, do review the analysis by Nadine Yousif in Toronto.
