TORONTO — Canadian Prime Minister Justin Trudeau said Monday that Americans are “beginning to wake up to the reality that tariffs on everything from Canada would make life a lot more expensive.”
Speaking at an event hosted by the Halifax Chamber of Commerce, Trudeau also said dealing with Donald Trump on trade will be “a little more challenging” than last time.
Trudeau said this is because Trump’s team is coming up with much clearer ideas what they want immediately than after his first election victory in 2016.
The Republican president-elect does threatened to impose a 25% tax on all products enter the US from Canada and Mexico unless they stem the flow of migrants and drugs.
“Trump was elected on a promise to make life better and more affordable for Americans, and I think people south of the border are starting to wake up to the real reality that tariffs on everything from Canada make life a lot more expensive would make,” Trudeau said. said.
Over the weekend, Trump appeared in an interview with NBC’s “Meet the Press,” in which the president-elect said he cannot guarantee that his promised rates on important American foreign trading partners increase prices for American consumers.
Like Trump makes good on its threat to impose 25% tariffs on everything imported from Mexico and Canada, the price increases that could follow will clash with his campaign promise to give American families a break from inflation.
Economists say companies have little choice but to pass on the extra costs. increase prices dramatically for food, clothing, cars, alcohol and other goods.
The Produce Distributors Association, a Washington trade group, has said tariffs will raise prices for fresh fruits and vegetables and hurt U.S. farmers if countries retaliate.
Canada already is investigation into possible retaliation tariffs on certain items from the US if Trump follows through on the threat.
Trudeau said his government is still considering “the right ways” to respond, pointing to the fact that Canada introduced billions in new tariffs against the U.S. in 2018 as a tit-for-tat response to new taxes on Canadian steel and aluminum .
Many of the American products were chosen for their political rather than economic impact. Canada, for example, imports just $3 million worth of yogurt from the U.S. annually, and most of that comes from a single factory in Wisconsin, the home state of then-Republican Speaker of the House Paul Ryan. That product was subject to a 10% excise tax.
“It was the fact that we were putting tariffs on bourbon and Harley-Davidsons and playing cards and Heinz ketchup and cherries and a number of other things that were very carefully targeted because they had a political impact on the president’s party and colleagues,” he said. Trudeau.
Trudeau said the tariffs would be very damaging.
“One of the most important things we have to do is not to panic and not to panic,” Trudeau said.
“Knowing these would be absolutely devastating, which means we have to take them seriously, but it does mean we have to be thoughtful and strategic and not go around making arguments for our opponents, but present our arguments in a meaningful and unified way.”
Canadian officials have said it is unfair to lump Canada in with Mexico. U.S. Customs agents seized 43 pounds of fentanyl at the Canadian border last year, compared to 21,100 pounds at the Mexican border.
Most of the fentanyl reaching the US – where it causes about 70,000 overdose deaths annually – is created by Mexican drug cartels using precursor chemicals smuggled from Asia.
On the immigration front, U.S. Border Patrol reported 1.53 million encounters with irregular migrants at the southwestern border with Mexico between October 2023 and September 2024. That compared to 23,721 encounters at the Canadian border during that time.
Trump has also claimed that the US “subsidizes Canada to the tune of more than $100 billion per year.”
On the US trade deficit Canadian Ambassador to Washington Kirsten Hillman told the AP The U.S. had a $75 billion trade deficit with Canada last year, but noted that a third of what Canada sells to the U.S. is energy exports and prices have been high.
About 60% of U.S. crude oil imports come from Canada, as do 85% of U.S. electricity imports.
Canada is also the largest foreign supplier of steel, aluminum and uranium to the US and has 34 critical minerals and metals that the Pentagon covets and invests in for national security.
Nearly $3.6 billion Canadian (US$2.7 billion) worth of goods and services cross the border every day. Canada is the main export destination for 36 US states.