'Would be...biggest trade war': Canada warns US amid Trump threats
What's the story
Canada is preparing for a possible trade war with the United States after President-elect Donald Trump proposed a 25% tariff on Canadian imports.
Canadian Foreign Minister Melanie Joly has cautioned this could trigger "the biggest trade war between Canada and the US in decades."
She said at a press conference, "We are ready to put maximum pressure. Canada has...series of measures prepared if Trump carries out his threat, which would have a major impact on Canadian consumers and jobs."
Countermeasures
Canada's retaliatory measures against US tariffs
In retaliation to Trump's proposed tariffs, Canada is weighing its own tariffs on US goods like steel products, glassware, and orange juice, sources told AFP.
The government is also mulling stopping energy exports to the US.
"We will be strong and unequivocal in our defense of Canada," said outgoing Prime Minister Justin Trudeau, adding, "The proposed tariffs would put American jobs at risk, raise prices for American consumers, put...collective security at risk and raise costs all across the continent."
Economic fallout
Potential economic impact of US-Canada trade war
The prospect of a trade war with the US could spell disaster for Canada's economy.
Experts predict a potential fall in GDP by over 5%, with significant increases in inflation and unemployment rates.
The US-Canada trade relationship is critical, with goods and services worth $3.6 billion exchanged daily.
According to Canadian government, the US is the single greatest investor in Canada, and Canada was the largest source of foreign direct investment (FDI) in the US at the end of 2022.
Political backlash
Canadian leaders criticize Trump's trade stance
Meanwhile, Trudeau's former ally, Jagmeet Singh, leader of Canada's New Democratic Party, has called Trump a "clear threat" to Canada's economy and workforce.
Singh proposed Canada could retaliate by halting the supply of critical minerals to the US.
He stressed any conflict should also affect Americans, saying, "If he wants to pick a fight with Canada, we have to make sure it's clear that it's going to hurt Americans as well."