Here’s How Canada Is Striking Back At Trump’s Tariffs

US-Canada relations are unraveling at a breakneck speed after President Donald Trump imposed sweeping tariffs on Canadian imports, prompting Prime Minister Justin Trudeau to announce immediate retaliation.

Trump signed an executive order imposing a 25% tariff on all Canadian imports, with a lower 10% rate on Canadian energy products, effective February 4. Mexico was also hit with a 25% tariff across the board, while China faces a 10% tariff.

Hours after Trump’s announcement, Trudeau responded with a $155 billion retaliatory tariff package. “We did not want this, but Canada is prepared,” Trudeau declared.

His countermeasures, set to roll out in two phases, will target key American industries, including automotive, agriculture, and consumer goods:

  • Phase 1 ($30 billion): Consumer products such as orange juice, peanut butter, wine, spirits, beer, coffee, apparel, and appliances.
  • Phase 2 ($125 billion): Passenger vehicles, steel, aluminum, aerospace products, beef, pork, and dairy.

A $1-Trillion Economic Hole

Trump’s tariffs are one of the largest trade actions in modern history, covering 43% of total US imports—an economic earthquake estimated to be worth $1.3 trillion. The aftermath is projected to raise the average US tariff rate from 3% to 10.7%, the highest in decades.

The move is also expected to shave 1.2% off US GDP, according to the Federal Reserve’s estimates. With the tariff on energy projects its currently expected that there will be a 0.7% rise in core inflation.

For comparison, the largest single action in the 2018-2019 US-China trade war was raising tariffs from 10% to 25% on $200 billion worth of imports, which resulted in a 0.4% reduction in US GDP. The new 10% tariff on $400 billion of Chinese imports is even bigger in value and will worsen economic uncertainty for global manufacturers and investors.

Canadian Provinces Standing Up

On top of Trudeau’s announcements, Canada’s provinces have also introduced their own measures, mostly hitting where it would economically hurt–alcohol.

Premier David Eby has ordered the BC Liquor Distribution Branch to immediately halt purchases of American alcohol from US “red states”. The province has also directed all government agencies, including health authorities and Crown corporations, to exclude U.S. suppliers from any new purchasing or procurement agreements.

Ontario Premier Doug Ford has ordered the LCBO to remove all American alcohol from its shelves starting Tuesday. The province will also exclude American companies from provincial contracts and procurement where possible. Ford also pledged a $22 billion stimulus package to support Ontario businesses affected by the trade war.

“Canada has so much of what America needs: nickel, energy, uranium, aluminum,” Ford said. “We will stand strong.”

Premier François Legault has instructed the Société des alcools du Québec to immediately stop selling American liquor. The provincial government will also fast-track permits and funding for industries impacted by tariffs, including aerospace and agriculture. Legault estimated that over 100,000 jobs in Quebec could be affected by Trump’s tariffs and vowed that his government “will not stand idly by.”

In Alberta, Premier Danielle Smith is pushing for an accelerated energy independence strategy, calling on the federal government to: fast-track new oil and gas pipelines to the east and west coasts, expand LNG exports to Europe and Asia, and increase refinery capacity to reduce reliance on US markets.

“Alberta will do everything in its power to diversify our markets and ensure our resources never get held hostage again,” Smith stated.

Premier Wab Kinew has also ordered Manitoba Liquor and Lotteries to halt all American product sales in government-run stores. The province is launching a “Buy Local” initiative, directing government agencies and businesses to prioritize Canadian-made goods. Manitoba said it will also support affected workers and businesses with a financial assistance program, with Kinew claiming that “we all need to stand together—40 million strong.”

Premier Tim Houston is doubling highway tolls for US commercial vehicles transporting goods through Nova Scotia. The province also vows to remove all US alcohol from its shelves by Tuesday. Houston said the province is ramping up its trade agreements with European and Asian partners to offset reliance on American imports.

Saskatchewan Premier Scott Moe has called for Canada to expand its agricultural exports to alternative markets, exploring partnerships with Asian and Middle Eastern countries to reduce reliance on US buyers for wheat and canola. Moe is also advocating for stricter border security measures to counter Trump’s fentanyl argument.

And in Newfoundland & Labrador, Premier Andrew Furey called Trump’s tariffs an “existential threat” to Canada, pledging support for businesses that will be affected. The province is accelerating its offshore oil projects and securing new trade partnerships with the EU.

Trump quickly fired back at Canada’s countermeasures, warning that any retaliation would be met with a potential increase to 50% tariffs.

“If Canada retaliates to our 25% tariffs, we will double them,” Trump threatened.

His administration, backed by hardline trade hawks, sees this as an opportunity to reassert economic dominance over Canada and Mexico.


Information for this briefing was found via Bloomberg, CBC, CP24, Unusual Whales, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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