LILLEY: Trump punches Canada hard with tariffs, warns us not to hit back
Tariffs take effect Tuesday and stay in place until border issues are dealt with, according to the U.S. president.
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The message from Donald Trump is clear: The president is hitting us with 25% tariffs on Canadian exports to the United States and if we retaliate then we will be hit harder. Energy exports to the U.S., though it’s not clear if this is just oil or also electricity, will face a 10% tariff.
The entire political and business community sat on the edge of their seats for most of Saturday waiting to find out if Trump would follow through on his threats.
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On Saturday, Trump’s pick for Commerce Secretary, Howard Lutnick, called Prime Minister Justin Trudeau to tell him the news about the tariffs and to warn against retaliation. Basically, if Canada retaliates to the American 25% tariffs we will see an even higher rate within the week.
“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump said in a statement.
In response Saturday night, Trudeau announced 25% tariffs on up to $155 billion of U.S. imports.
“If President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us,” Trudeau said.
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The Canadian government has already addressed Trump’s calls on border security by implementing a $1.3 billion border plan that includes helicopters, new canine teams and imaging tools.
Conservative Leader Pierre Poilievre condemned Trump’s tariffs as an attack on America’s “closest neighbour, greatest ally and best friend.” Poilievre called for dollar for dollar retaliation though a targeted response, “carefully aimed at maximizing impact on American companies while minimizing impact on Canadian consumers.”
Poilievre wants the government to avoid putting tariffs on essentials we rely on like food but to go hard and heavy on products that we make here in Canada or can source elsewhere.
While the Americans say we need to fix the border before these tariffs are lifted, the Trudeau government has downplayed any Canadian contribution. They claim that Canada represents less than 1% of all illegal migration and less than 1% of all fentanyl seized across the Canadian and Mexican border, while the Americans claim more.
Last year, the number of illegal migrants crossing from Canada was 7% of all illegal migrants, a growing number while Mexico was declining. On drugs, there is scant public evidence that Canada is a problem, but the Americans have long pointed to intelligence that the drug supply from Canada is expanding.
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“There is also a growing presence of Mexican cartels operating fentanyl and nitazene synthesis labs in Canada. A recent study recognized Canada’s heightened domestic production of fentanyl, and its growing footprint within international narcotics distribution,” Trump’s executive order stated.
“We need to protect Americans, and it is my duty as President to ensure the safety of all. I made a promise on my Campaign to stop the flood of illegal aliens and drugs from pouring across our Borders, and Americans overwhelmingly voted in favor of it,” Trump said in a post to his Truth Social account.
Trump was clear in his statements and campaign promises while it’s not clear that Canadian politicians, especially at the federal level, ever took his claims seriously. In fact, too often they have been dismissive despite knowing that the new president seemed serious while our response was anything but.
You don’t need to agree with Trump’s claims to realize that not taking him seriously would put us in economic danger.
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Ontario Premier Doug Ford said that he wished President Trump had not taken these actions against the closest ally and trading partner of the United States.
“I wish we weren’t here. I wish Ontario and Canada were working together with our American friends and allies to make our two countries the richest, most successful, safest, most secure on the planet,” Ford said.
Alberta Premier Danielle Smith took credit for her province’s oil sector getting a reduced 10% tariff, claiming her diplomatic efforts played a role. While denouncing Trump’s decision and saying she will work with her provincial and federal counterparts, Smith said that Canada must reorient trade to expand Canada’s opportunities.
“We must unleash the true economic potential of our country, which possesses more wealth and natural resources than any other nation on earth,” Smith said.
For far too long, we have restricted our own growth potential and limited our natural resources industry. Now, we may be forced to do what we should have been doing all along in the face of these American moves.
Whether we will do that, or stick to the low growth, low-carbon agenda of the Trudeau Liberals that put us in this weak spot, remains to be seen.
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