By Asmita - Feb 02, 2025
Canadian Prime Minister Justin Trudeau imposes a 25% retaliatory tariff on $155 billion worth of US goods in response to President Trump's tariffs, targeting items from beer to household appliances. Trudeau emphasizes the impact on American individuals, dismisses drug-trafficking claims, and encourages Canadians to support domestic products. The move may disrupt the $22 billion daily trade flow between the US and Canada, especially affecting the automotive industry.
A factory interior showcasing large rolls of aluminum, highlighting the process of steel and aluminum imports and exports. via FMT
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Canadian Prime Minister Justin Trudeau launched a robust response to President Donald Trump's tariffs, announcing a comprehensive 25% retaliatory tariff on $155 billion worth of US goods. The strategic countermeasure will be implemented in two phases: $30 billion of tariffs effective immediately and the remaining $125 billion within three weeks. Trudeau emphasized that while these actions are unwelcome, Canada would "not retreat" in defending its economic interests.
The targeted US products include a diverse range of goods spanning multiple sectors: beer, wine, bourbon, fruits, vegetables, perfumes, clothing, shoes, sporting equipment, lumber, and household appliances. Trudeau explicitly warned that "Americans will suffer" from these economic measures, highlighting the interconnected nature of US-Canada trade. The Prime Minister also encouraged Canadians to support domestic products, suggesting they choose Canadian alternatives and potentially modify vacation plans to bolster the national economy.
Trudeau challenged Trump's justification for the tariffs, particularly the claim about drug trafficking. He pointed out that less than 1% of fentanyl entering the US originates from Canada, and the country has already pledged C$1.3 billion in border security measures. "Tariffs are not the ideal means to collaborate for saving lives," Trudeau stated, underscoring the diplomatic tensions. The Canadian government is also considering non-tariff measures related to critical minerals and procurement, though specific details remain undisclosed.
The potential economic impact is significant, with experts warning that these tariffs could disrupt the approximately $22 billion daily cross-border trade flow. The automotive industry may be particularly vulnerable, as car parts frequently cross borders multiple times during production. TD Economics estimates that the average US car price could increase by $3,000. Trudeau stressed that while Canada values its relationship with the US, it will not compromise its economic interests, setting the stage for a potentially prolonged trade confrontation.
