Canada PM, Justin Trudeau, made a dig at newly-elected US President Donald Trump's 25% tariffs on imports from Canada.
Talking at the Halifax Chamber of Commerce, he said such tariffs would increase costs considerably for the American consumers and badly hamper both countries' economies. After all, America greatly depends on crude oil, electricity, and other agricultural products exported by Canada. All these things will get costlier with this new plan.
Responding to Trudeau's comments, AP News reported that Trump jokingly called Canada the "51st state" and Trudeau the "governor." Still, the issue is deep. Trump's tariff proposal intends to force Canada and Mexico to crack down on drug running and illegal immigration. Trudeau, however, disagreed that putting Canada on that list is fair since the migrant and drug trafficking statistics at the Canadian border are much lower than in Mexico.
Experts say that tariffs on Canadian products would not only harm the economy of Canada but also cause increased prices of daily necessities in the US, like food, clothing, and cars. The US companies would transfer these increased costs to the consumers, which would defeat the aim of the promise of President Trump of reducing inflation. Economists have highlighted the strong trade relations between the two nations, with nearly $2.7 billion worth of goods and services crossing the border every day.
Canada to Retaliate Against US Tariffs
Trudeau said Canada would retaliate to any unfair tariffs, much like it did in 2018 when it imposed duties on politically sensitive US products, per WSJ. This strategic response hit goods like bourbon and motorcycles to make a political impact on Trump's allies. Trudeau also emphasized that the process should be cautious and measured while not panicking but preparing for economic fallout.
As long as the tariff threat continues, Trudeau's statements have reminded everyone that economies, the US and Canada being a good example, are closely linked and integrated.
Either way, the consequences of a disruption will be severe on either side of the border and is a critical test in relations between the two.
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