Canada is already considering possible retaliatory tariffs on U.S. goods should President-elect Donald Trump proceed with his threat to impose sweeping tariffs on Canadian products, a senior official confirmed Wednesday.
Trump has repeatedly threatened to levy tariffs on Canadian and Mexican imports unless the countries take stronger action to curb the flow of drugs and migrants across their borders. He proposed imposing a 25% tariff on all products entering the U.S. from Canada and Mexico as part of his early executive actions.
However, on Wednesday evening, Trump posted on Truth Social that he had a “wonderful conversation” with Mexican President Claudia Sheinbaum, during which she agreed to stop migration through Mexico. “Mexico will stop people from going to our Southern Border, effective immediately,” Trump declared. “This WILL GO A LONG WAY TOWARD STOPPING THE ILLEGAL INVASION OF THE USA.”
It remains unclear whether this development will affect Trump’s plans to impose tariffs on Canada and Mexico, but Canadian officials are preparing for all eventualities. A senior government source revealed that Canada is considering potential targets for retaliatory tariffs, although no final decisions have been made. The official spoke on condition of anonymity, as they were not authorized to discuss the matter publicly.
This comes after Trump’s first term in office, when retaliatory tariffs were a frequent response to U.S. trade policies. In 2018, Canada introduced billions of dollars in new tariffs on U.S. goods in response to U.S. tariffs on Canadian steel and aluminum. Many of the retaliatory measures were aimed at U.S. products with political rather than economic significance. For example, Canada imposed a 10% duty on yogurt imports from Wisconsin, home to then-House Speaker Paul Ryan, and on whiskey from Kentucky and Tennessee, the states of Senate Leader Mitch McConnell and House Speaker Paul Ryan, respectively.
Trump’s recent remarks, particularly his comparison of the U.S.-Canada border to the U.S.-Mexico border, have raised concerns in Canada. While U.S. Border Patrol made 56,530 arrests at the Mexican border in October alone, Canada saw 23,721 arrests from October 2023 to September 2024—far fewer in comparison. U.S. authorities also seized 43 pounds of fentanyl at the Canadian border last fiscal year, a sharp contrast to the 21,100 pounds seized at the Mexican border.
Despite the disparity, Canadian officials argue that it is unfair to lump Canada together with Mexico when discussing migration and drug trafficking. They also caution that imposing tariffs would have significant negative impacts on both economies. Canada is a crucial trading partner for the U.S., with nearly $3.6 billion (US$2.7 billion) in goods and services crossing the border daily. Canada is also the top exporter of crude oil, electricity, steel, aluminum, and critical minerals to the U.S., with many of these supplies integral to U.S. national security.
Prime Minister Justin Trudeau held an emergency virtual meeting on Wednesday with provincial leaders to discuss the potential ramifications. “I don’t want to minimize for a moment the gravity of the challenge we now face,” Deputy Prime Minister Chrystia Freeland said. “Now is really a moment for us not to squabble amongst ourselves.”
Provincial leaders are urging Trudeau to negotiate a separate trade agreement with the U.S. that excludes Mexico, as tensions continue to rise over Trump’s proposed tariffs. Meanwhile, Sheinbaum, Mexico’s president, has also stated that her administration is preparing a list of possible retaliatory measures should the situation escalate.
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