Trudeau says Trump's 'dumb' trade war is designed to collapse the Canadian economy
PM says Trump is trying to make it easier to annex Canada — but it won't work
An unbowed Prime Minister Justin Trudeau said Tuesday that Canada will hit back hard at the U.S. after President Donald Trump launched a North American trade war by slapping devastating 25 per cent tariffs on virtually all Canadian goods.
Speaking to reporters at a news conference on Parliament Hill, Trudeau said Trump is trying to prompt "a total collapse of the Canadian economy" because he thinks that will "make it easier to annex us," something the U.S. president has repeatedly said he wants to do.
But Trudeau said that will never happen because "when it comes to defending our great nation, there is no price we all aren't willing to pay."
Trudeau said Canada will not back down from a fight in the face of "completely bogus and completely unjustified" trade action that has the potential to ruin bilateral relations and prompt job losses, economic devastation and higher inflation on both sides of the border.
Trudeau has already slapped tariffs on an initial tranche of $30 billion worth of American goods and promised $125 billion more will face levies in three weeks' time. He said more, non-tariff measures are coming if Trump doesn't immediately back down.
Trudeau said Trump is doing something "very dumb" by attacking Canada like this, given there will be serious ramifications for American workers and consumers with higher prices on everything from food, car parts and fertilizers to pharmaceuticals and paper products.
Referencing a recent Wall Street Journal editorial that called Trump's trade action against allies "dumb," Trudeau said he had a message for the president: "Donald, you are a very smart guy, this is a very dumb thing to do."
Trudeau said Canada doesn't want to be embroiled in a painful trade war with a country it once regarded as something of a best friend but that Trump's act of economic self-sabotage has given the country no choice.
"Your government has chosen to do this to you," Trudeau said in remarks directed at the American people. "A fight with Canada will have no winners."
Trudeau said Trump's claims that these tariffs are all about the flow of fentanyl is nonsense and it's now clear there was never a possibility of avoiding these tariffs by cracking down on the border as Canada did in the last few months with a $1.3-billion border plan.
He said the fentanyl excuse for the tariffs was something of a cover — a "legal justification" to tap emergency presidential trade powers so he can invoke tariffs that clearly violate the Canada-U.S.-Mexico Agreement (CUSMA) that Trump himself signed in his first term.
Trudeau said Trump's actions could destroy one of the most successful relationships the world has ever known while also drawing closer to a "lying, murderous dictator" like Russian President Vladimir Putin.
"The United States launched a trade war against Canada, their closest ally, their closest friend, at the same time they are talking about working positively with Russia," Trudeau said. "Make that make sense."
Trudeau said he won't "sugarcoat" just how damaging these tariffs could be for the Canadian economy.
Economists have said a tariff this large could plunge the economy into a recession. The Bank of Canada said late last month a protracted trade war could lead to "severe" consequences that will be difficult to reverse.
"This is going to be tough," Trudeau said, while also promising to harness the enormous fiscal firepower of the federal government to help workers and business weather this storm.
Trudeau did not announce specific tariff-relief measures on Tuesday but said Ottawa is open to relaxing employment insurance requirements to help workers who are grappling with job loss.
The prime minister urged Canadians to rally around the flag and make patriotic choices when buying goods and deciding where to vacation.
"Do not give up," Trudeau said. "This is the time to redouble your efforts. Canada remains the best country in the world."
Trump reacted to Trudeau's speech, which was carried live on American networks CNN, CNBC and Fox News Channel.
"Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!" he said in a social media post.
Premiers launch their own counterattacks
The premiers are already promising countermeasures of their own, including pulling American liquor off store shelves, hiking road tolls for American commercial drivers and blocking U.S. firms from bidding for government procurement contracts to try and force Trump to reverse course.
Ontario Premier Doug Ford said he agrees with Trudeau's contention that Trump is trying to prompt an economic collapse in Canada.
Like Trudeau, Ford said he's prepared to "fight like we've never fought before."
Ford said he is prepared to go through with some more draconian measures, including possibly levying an export charge on every megawatt of power Ontario sells to the U.S. in the coming days.
He also said he's open to cutting off energy supplies entirely to plunge some 1.5 million customers in the U.S. into darkness, if necessary.
Ford said his government will use every tool in the toolbox to hit back against "the one man" who has ruined what was once the best bilateral relationship in the world.
The Ontario premier urged American lawmakers, particularly Republican congressmen and women and senators, to rebel against Trump's policies, which could make life a lot more difficult for their constituents.
Ford said American voters should punish Trump at the congressional midterm elections next year to send a message they won't stand for this sort of economic warfare against a supposed ally.
"He needs to pay a price in the midterms. If I have to go down there and knock on the doors myself, I will," Ford said.
Poilievre says he's not a 'MAGA guy'
Alberta Premier Danielle Smith said Trump's actions are a betrayal.
"To see this escalation is so disappointing, so damaging," she said in an interview with CNBC. "I don't know why the president is behaving this way. It's illegal and we're going to challenge it."
She said the tariffs will drive up oil and gas prices for American consumers, even if Trump is levying a smaller 10 per cent tariff on energy.
Some U.S. Midwest refineries are entirely reliant on heavy crude from Alberta, and the Americans don't produce nearly enough oil on their own to meet demand. Canada exported more than four million barrels of oil a day to the U.S. last year.
It's obvious some Americans will be on the hook for higher prices at the pump now that there are levies on their largest foreign supplier, Smith said.
Conservative Leader Pierre Poilievre, meanwhile, said Trump "stabbed America's best friend in the back."
"My message to the president is this: Canada will fight back. We will defend our people and our economy, and we will put Canada first," he said.
Poilievre said any tariff revenue raised from the federal countermeasures should be plowed into helping workers affected by the forthcoming economic dislocation.
He also sought to assure Canadians that he's not a Trump acolyte.
"The president says that he doesn't like me, he doesn't think I'm a MAGA guy. It's true, I'm not," he said, referencing Trump's Make America Great Again slogan. "I have one job to do: fight for this country."
NDP Leader Jagmeet Singh called on the prime minister to reconvene Parliament to pass emergency legislation to help Canada deal with the tariff fallout.
"First let's get support in place for those workers. Let's make sure they can get the help that they need, then we can worry about an election after that," he said.
Vance says Canada hasn't been 'serious' at the border
Vice-President JD Vance told reporters on Capitol Hill Tuesday that the president is "going to have conversations with the Canadians."
"We need to see real engagement on the fentanyl issue. That is fundamentally the underlying element for tariffs. The Canadians have not been serious about stopping the drug trade," Vance claimed.
Despite Vance's assertions, the Canadian government has been busy rolling out a billion-dollar border security package designed to curb the illegal drug trade and the flow of migrants — and that's already producing results.
Data from the U.S. Customs and Border Protection (CBP) released earlier this month shows there has been a significant decrease in seizures of fentanyl coming from Canada.
The CBP's own data registered a 97 per cent drop in January compared to December 2024 at the northern border — evidence, the Canadian government says, that its new border security measures are bearing fruit and the Americans are being unreasonable.
In addition to appointing a fentanyl czar whose only job is to lead a nationwide crackdown on the deadly drug, the federal government has also deployed some 10,000 border and law enforcement personnel along the Canada-U.S. boundary and sent new helicopters and drones into the skies to keep a closer eye on the 49th parallel.
Even before these new efforts, Canada represented less than one per cent of all seized fentanyl imports into the U.S., according to federal data. About 19.5 kilograms was seized at the northern border last year compared to 9,570 kilograms at the southwestern border.
'Economic call-to-arms'
Lana Payne, the president of Unifor, Canada's largest private-sector union, issued an "economic call-to-arms" in what she's calling "a full-on trade war."
"Every Canadian politician, business leader, worker and resident must fight back. Trump has seriously misjudged the resolve and unity of Canadians, and he has misjudged how damaging this trade war will be for American workers," she said.
Trump's tariff will make most Canadian goods less competitive because American importers will now have to pay the U.S. government a 25 per cent levy to bring them into the country.
Those added costs could then be passed on to American consumers, pushing up prices.
Some importers may decide to drop certain Canadian products altogether, putting pressure on Canadian businesses and the people they employ.
Industry groups are already warning of dire consequences. Canadian Manufacturers and Exporters said Trump's tariffs "threaten the future of the most successful economic relationship in the world." The Canadian Federation of Independent Business called the brewing trade war "a massive economic threat." The Grain Growers of Canada said the trade war "could push many family farms to the brink."
Global Automakers of Canada, the industry group that represents 25 carmarkers like BMW and Honda, said Trump has to quickly lift his tariffs "to avoid permanent and significant damage to the North American automotive sector."
The Business Council of Canada said Trump's actions have left the trilateral trade deal that he himself negotiated in his first term, CUSMA, in tatters. "No one wins in a trade war and the tariffs imposed today by the Trump administration will hurt workers, farmers and families," the council said.
The Canadian Association of Petroleum Producers (CAPP) said the country's relationship with the U.S. has "fundamentally changed."
"We are at a significant moment in Canada's history — we need to seize this moment" and become less reliant on the Americans, CAPP's president and CEO said.
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