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Middle East Observer

Sunday, April 6, 2025

Canada Gears Up for Potential Trade War as Trump Era Looms

Must read

As tensions rise on the eve of Donald Trump’s inauguration, Canada braces for a significant shift in its relationship with its largest trading partner. The speculation surrounding Trump’s proposed 25% tariff on all Canadian imports has driven Canadian officials to craft a multi-layered defense strategy aimed at safeguarding the nation’s economy, which hinges on the $1.3 trillion annual trade relationship with the United States.

During a media availability following her swearing-in as Canada’s Minister of Transport, Anita Anand emphasized Canada’s readiness to retaliate against Trump’s proposed tariffs. “If pushed, our response will be the single largest trade blow the U.S. economy has ever endured, considering Canada is America’s largest export market,” she stated in an interview on CTV’s Question Period.

Anand, who also sits on Prime Minister Justin Trudeau’s cabinet committee on Canada-U.S. relations, underscored the importance of mirroring any U.S. actions, stating, “We have planned multiple rounds of counter tariffs against the United States, which we will not hesitate to use, if necessary.” Her comments reflect the broader sentiment within the Canadian government, which remains poised to protect Canadian workers and industries.

A tariff war could have severe ramifications, with economic experts warning it might imperil millions of Canadian jobs. According to the World Bank, the United States is the largest export market for 36 U.S. states, making the economic interdependence between the two nations critical. A trade war could thus disrupt supply chains and economic stability on both sides of the border.

A contentious issue remains Canada’s energy exports, which Alberta Premier Danielle Smith has argued should not be leveraged in the trade dispute. Smith’s refusal to support federal plans for counter-tariffs highlights a significant divide between regional and national government strategies. Yet, as Minister Anand indicated, “No stone will be left unturned,” suggesting that energy might still be on the table as part of the comprehensive counter-tariff response.

Prime Minister Trudeau’s “Team Canada” approach, developed to navigate the complexities of U.S. relations, has been reinforced by the formation of a new Canada-U.S. relations council. Despite efforts to communicate the integrated nature of the Canada-U.S. economy, Anand noted a lack of comprehensive understanding in Washington about the potential impacts of countermeasures.

“We need to ensure that the Canadian message, that patriotic, truly nationalistic message, is heard on both sides of the border,” she stressed. This includes reiterating the symbiotic relationship the two economies share, which is instrumental in maintaining stability.

A senior government source revealed that while the consensus points to the imposition of tariffs, the exact severity remains uncertain. This uncertainty drives the Canadian government’s strategy, which includes a phased response ready to be deployed immediately upon any move from Trump’s administration.

As Canada stands on the brink of potential economic confrontation, the stakes are high. The measures being prepared could redefine the economic landscape, impacting not only bilateral trade but also global market dynamics. The government’s proactive stance exemplifies its commitment to protecting national interests while navigating one of the most complex geopolitical challenges of recent times.

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AID MUBARAK