Canada is preparing for the possibility of retaliatory tariffs against the United States if President-elect Donald Trump follows through on his threats to impose sweeping tariffs on Canadian goods. This warning comes after Trump’s statement that he intends to levy a 25% tax on all products entering the U.S. from Canada and Mexico, unless these countries take action against the flow of drugs and migrants across their borders.
A senior Canadian official confirmed Wednesday that the government is already reviewing possible items to target for tariffs. But no final decision has been made, and the official, who spoke anonymously, stressed that the plans are still in early stages.
Trump’s Threats and Ongoing Discussions with Mexico
Trump made his threats about tariffs public earlier this week by casting them as the tool for stopping illegal immigration and drug trafficking. He declared he would sign an executive order that would enforce a 25% tax on all goods from Canada and Mexico unless both countries make stronger actions to curb the flows of migration and drugs.
But Trump appeared to shift the spotlight when he posted on Truth Social about a conversation with Mexico’s new President, Claudia Sheinbaum. In the post, Trump said, “Mexico will stop people from going to our Southern Border, effective immediately. THIS WILL GO A LONG WAY TOWARD STOPPING THE ILLEGAL INVASION OF THE USA. Thank you!!!”
He further added that Mexico had agreed to halt migration through its territory into the U.S. and work on the drug trade: “She has agreed to stop migration through Mexico, and into the United States, effectively closing our Southern Border. We also talked about what can be done to stop the massive drug inflow into the United States, and also, US consumption of these drugs.”
This is one reason for questioning whether Mexico will no longer be under threat from tariffs, though this fact remains unclear due to the statement by Trump.
Canada’s Preparations
Canada has begun preparations ahead of the possible scenario by Trump as well, which may become worst. The Canadian official said that no final decision has been made, but the government is considering which U.S. products would be most politically impactful in a retaliatory move. During Trump’s first term, Canada responded to U.S. tariffs by imposing its own tariffs on American goods, including products like yogurt and whiskey, chosen partly for their political symbolism.
The official admitted to the potential impacts of the imposition of these tariffs, while knowing that economic costs for both countries may be quite hefty. Canada is one of America’s biggest trading partners, trading around $3.6 billion daily in goods and services. It has resources like steel, aluminum, and oil that this country supplies; the nation has remained the top crude oil supplier as well as the electric company.
Trump’s Claims on Immigration and Drugs
The rhetoric of Trump towards Canada and Mexico has focused on immigration and drugs largely. He recently made some comments regarding the flow of illegal migrants and fentanyl, a deadly drug that flows across the borders. But the numbers involved in this case are much smaller in comparison to those at the southern U.S. border.
As noted above, in October the U.S. Border Patrol recorded 56,530 apprehensions along the Mexican border, but only 23,721 apprehensions were recorded at the Canadian border during the period between October 2023 and September 2024. What’s more, the agents at the Canadian border last fiscal year seized a paltry 43 pounds of fentanyl, compared with 21,100 pounds along the Mexican border.
Despite these lower numbers, Canadian officials say they should not be punished for problems bigger at the southern border. “Canada is not the problem,” said one government spokesperson. “Tariffs would have serious consequences for both our countries.”
Concerns Over Potential Migrant Influx
This means the big worry for the Canadian authorities is that when Trump continues his mass deportations, people may start migrating into Canada from the U.S. because there would be no guarantee that their lives would not be touched in one way or the other by his policies.
In a show of unity, Canadian Prime Minister Justin Trudeau Wednesday convened an emergency virtual meeting with provincial leaders to thrash out the issue. Deputy Prime Minister Chrystia Freeland emphasized the need for a unified response, stating, “Our country is facing a significant challenge. Now really is a moment for us not to squabble amongst ourselves.”
Trudeau’s government has also been exploring how the two countries can bilaterally sign a trade agreement from which Mexico is excluded—a recommendation made by some local premiers.
Mexico’s Strategy on Migration and Fentanyl
Mexican President Sheinbaum addressed how her country was focusing on migration and fentanyl. She said, “We discussed Mexico’s strategy on migration issues, and I told him the caravans are not reaching the northern (US) border, because Mexico is taking care of them.” She also mentioned discussions about cooperation on security issues: “We also talked about reinforcing cooperation on security issues, within the framework of our sovereignty, and the campaign we are carrying out to prevent fentanyl consumption.”
Conclusion: Tensions Remain as Trade Talks Continue
As the situation unfolds, both Canada and Mexico remain uncertain about the impact of Trump’s threatened tariffs. The threat of retaliatory measures weighs heavily on both nations, and negotiations with the U.S. will play a significant role in shaping the future of North American trade relations.
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