Canadians are waking up to a new and uncertain reality after U.S. President Donald Trump’s deadline for economy-wide tariffs passed with no relent overnight, triggering a continental trade war.
The president’s executive order hitting Canada and Mexico with 25 per cent across-the-board tariffs, with a lower 10 per cent levy on Canadian energy, took effect at 12:01 a.m. ET.
“Tariffs, 25 per cent on Canada and 25 per cent on Mexico, and that’ll start,” Trump said Monday at the White House, sparking an immediate response from Wall Street. “They’re going to have to have a tariff.”
In a statement Monday night, Prime Minister Justin Trudeau said Trump’s tariffs are “unjustified” and Canada will retaliate with counter-tariffs and other measures.
Canada’s response is to start with tariffs on $30 billion worth of goods immediately and tariffs on the remaining $125 billion worth of American products 21 days later.
“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said. “While we urge the U.S. administration to reconsider their tariffs, Canada remains firm in standing up for our economy, our jobs, our workers, and for a fair deal.”
Trudeau is set to hold a press conference in Ottawa Tuesday morning with Finance Minister Dominic LeBlanc, Foreign Affairs Minister Mélanie Joly and Public Safety Minister David McGuinty.
The S&P 500 dropped two per cent in Monday afternoon trading. The Dow Jones Industrial Average dropped 1.5 per cent and the Nasdaq composite slumped 2.6 per cent.
Ontario Premier Doug Ford warned Americans that Canada would have a strong response and suggested he could shut down the movement of critical minerals and energy into the United States. He said Trump needs to pull back for the sake of Americans and Canadians.
“The market is going to go downhill faster than the American bobsled team,” Ford told NBC News Monday. “It’s going to be an absolute disaster.”
Ford said Trump is leaving Canada no choice.
“When one person attacks our country unprovoked, then we are going to respond,” he said.
Canadian officials and premiers made a month-long diplomatic push in Washington after Trump originally signed the executive order, which tied the duties to the illegal flow of people and drugs across the northern border.
Trump’s team has been supportive of Canada’s border security plan but it’s not clear that anything could have dissuaded the president from imposing tariffs.
U.S. Customs and Border Patrol data shows the number of people and drugs crossing illegally into the United States from Canada is minuscule compared to the volume coming across the southern border. It reports just 13.6 grams of fentanyl seized by northern Border Patrol staff in January.
Trump previously said the delay would allow time for an “economic” deal and on Monday suggested Canada and Mexico should “build their car plants, frankly, and other things in the United States, in which case you have no tariffs.”
