‘Nothing Off the Table’: Canada Prepares Unified Response to Looming U.S. Tariff Threat

As the U.S. contemplates imposing sweeping 25% tariffs on Canadian goods, Canadian leaders have pledged a strong and unified response to protect the nation’s economy. However, cracks within the “Team Canada” approach are emerging, especially on whether energy exports should be leveraged in this brewing trade battle.

Canadian Prime Minister Justin Trudeau, speaking after a high-level meeting with provincial and territorial premiers, emphasized a robust national strategy to counter the looming tariffs. “Nothing is off the table,” Trudeau declared during the press conference. “We will stand up for Canada, we will protect Canadians, and ensure the burden is shared across the country.”

Acknowledging the potential fallout, Trudeau assured support for industries likely to be impacted if the tariffs materialize. With roughly 75% of Canadian exports heading to the U.S., economists warn that the tariffs could have devastating consequences for Canada’s economy, reducing GDP by as much as 3.38%.

While Trudeau and key provincial leaders back counter-tariffs and potential restrictions on energy exports, dissent is growing. Alberta Premier Danielle Smith, representing Canada’s oil-rich province, publicly opposed federal policies that could restrict energy exports. “We will take whatever actions are needed to protect the livelihoods of Albertans,” she stated on social media, refusing to sign a joint statement released after the premiers’ meeting.

Other leaders, including Newfoundland and Labrador Premier Andrew Furey, advocate leveraging energy as a strategic asset. “Energy is Canada’s queen in this game of chess,” Furey remarked. However, he cautioned against deploying it prematurely, hinting at a calculated approach to counter U.S. tariffs.

U.S. President-elect Donald Trump, who assumes office on Monday, has been vocal about his support for tariffs, describing them as tools to protect jobs, boost the U.S. economy, and generate revenue. His administration’s plans include imposing a blanket 25% tariff on Canadian goods or targeting specific sectors to curb illegal immigration and drug trafficking.

Canadian officials have been proactive in lobbying U.S. legislators to avert the tariffs, including outreach efforts at Trump’s Mar-a-Lago resort. Ottawa also announced a C$1.3 billion investment in enhanced border security to address some of the Trump administration’s concerns.

While Canada’s economy faces a significant risk, analysts note that the U.S. economy would also suffer, with projected GDP losses of 0.9% to 1.6%. Moreover, Canada’s role as a critical supplier of energy and minerals to the U.S. positions it as a pivotal player in any trade negotiations.

Currently, 40% of crude oil processed in U.S. refineries originates from Canada, alongside substantial contributions of natural gas and electricity. Any disruption in these energy flows could inflate costs for American consumers and impact U.S. energy security.

The tariff showdown comes at a politically sensitive time for Canada. Trudeau has announced plans to step down as prime minister after his Liberal Party selects a new leader in March. An early federal election is anticipated this spring, adding another layer of complexity to Canada’s trade strategy.

Ontario Premier Doug Ford warned that up to 500,000 jobs in his province’s auto sector could be at risk if tariffs are implemented. Alberta, a key player in energy exports, could lose 50,000 jobs, according to financial forecasts.