Canadian CEOs asked for input on retaliatory tariffs as fears of trade war grow
Canadian CEOs are being asked for feedback as Canada plans to levy a tranche of retaliatory tariffs against the United States if President-elect Donald Trump makes good on his threat to apply 25% tariffs against Ottawa.
Canadian officials are currently discussing what goods they will hike tariffs on in response to Trump’s threats, according to CNN, which cited people familiar with the matter. If both Trump and Canada hiked tariffs it would mark the start of a trade war that could be bruising for U.S. and Canadian businesses.
Goldy Hyder, CEO of the Business Council of Canada, said that the government has recently reached out to his membership, which includes major CEOs, for input on retaliatory tariffs.
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“We need to carefully articulate how we would respond,” Hyder said. “Some have said we should just simply mirror their tariffs, others have said we should be more temperate in our response to get their attention, others have said we should ‘swing big’ and respond with great strength.”
Canadian officials are reportedly weighing tariffs that would be not only economically damaging, but also politically symbolic. Among the goods being considered for tariffs are U.S. steel products, orange juice, furniture, some alcoholic beverages like Jack Daniels whiskey, and more.
Canada is the biggest trading partner of the U.S., so a trade war would not be welcome news in the corporate world.
Trump first announced the tariff plan for Mexico and Canada in November. In a social media post he said he would put the tariffs into motion on Jan. 20, 2025, the day he is sworn in, and that the 25% tariffs are designed to coerce the two countries into stopping the flow of narcotics and illegal immigrants into the country.
“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 on social media. “Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!”
The crisis at the U.S. border with Mexico is far more dire than any problems on the border with Canada. Still, Trump’s team has noted that drugs and illegal immigrants have managed to come into the U.S. through Canada.
Ottawa is also reportedly considering tariffs on U.S. energy exports, that, combined with the U.S. applying tariffs on Canadian energy exports would be a big deal because Canada is the biggest exporter of oil and gas into the U.S.
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Rodney Lake, vice dean for undergraduate programs at George Washington University and director of the university’s Investment Institute, told the Washington Examiner that of the 7.8 million barrels of oil a day that flow into the U.S., about 4.4 million come from Canada and could face tariffs if Trump follows through.
Of note, Canadian Prime Minister Justin Trudeau recently announced his resignation. Although, he said that he intends to stay in the role until the Liberal Party elects a new leader.