Trudeau says US wants to collapse Canada’s economy with tariffs

Prime Minister Justin Trudeau has slammed Donald Trump’s sweeping tariffs on Canada, calling it a “very dumb thing to do” and vowed to conduct a “relentless fight” to protect its economy.

Trudeau accused the US president of planning “a total collapse of the Canadian economy because that will make it easier to annex us.” “That is never going to happen. We will never be the 51st state,” he told reporters on Tuesday.

Trump has imposed 25% tariffs on products entering the US from Canada and Mexico and has increased a levy on goods coming from China.

The Canadian prime minister announced retaliatory tariffs on US exports and warned that a trade war would be costly for both countries.

“This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners,” Trudeau said.

He said that Canada’s main goal remains to get the tariffs lifted so that they “don’t last a second longer than necessary”.

Trump says he is protecting US jobs and manufacturing, and trying to prevent illegal migration and drug trafficking. The US president says his goal is to clamp down on the powerful opioid fentanyl, and has variously blamed the other countries for the drug’s arrival in the US.

After Trudeau’s press conference, in a post on Truth Social, Trump doubled down on his threat of further tariffs: “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!”

Responding to the accusations, Trudeau said on Tuesday there was “no justification” for the new tariffs, because less than 1% of the fentanyl intercepted at the US border came from Canada.

Trudeau’s words were echoed by Mexican President Claudia Sheinbaum, who said there was “no motive, no reason, no justification” for Trump’s move. Speaking on Tuesday, she too vowed to issue her own “tariff and non-tariff measures” – but said further details would be given on Sunday.

Experts say Trump’s tariffs are likely to push up prices for consumers in the US and abroad.

The three countries targeted are America’s top trading partners, and the tit-for-tat measures have also prompted fears of a wider trade war.

Tariffs are a tax on imports from other countries, designed to protect against cheaper competition from elsewhere and boost businesses and jobs at home.

Canada’s retaliatory measures include a 25% reciprocal tariff that will be imposed on C$155bn (US$107bn; £84bn) of American goods:

• A tariff on C$30bn worth of goods will become effective immediately
• Tariffs on the remaining C$125bn of American products will become effective in 21 days’ time

Canada’s Immigration Minister Marc Miller warned that as many as a million jobs in Canada were at risk if the tariffs were implemented, given how intertwined trade was between the two countries.

“We can’t replace an economy that is responsible for 80% of our trade overnight and it’s going to hurt,” he said on Monday.

Speaking to the AFP news agency, a car manufacturing employee in the Canadian province of Ontario said people were indeed “pretty scared” of being laid off. “I just bought my first house,” Joel Soleski said. “I might have to look for work elsewhere.”

The sector is one that could be badly affected by the new tariffs regime in North America. Car parts may cross US-Canada border several times during the manufacturing process, and so might be taxed on multiple occasions.

Ontario Premier Doug Ford, whose province is home to Canada’s auto manufacturing industry, told reporters on Tuesday that he anticipates assembly plants will “shut down on both sides of the border” as a result of the tariffs.

The tariffs were called “reckless” by the Canadian Chamber of Commerce, whose president Candace Laing cautioned that the move would force both Canada and the US towards “recession, job losses and economic disaster”.

Ms Laing warned they would also increase prices for Americans, and force US businesses to find alternate suppliers that she said “are less reliable than Canadian ones”.

Canadian provincial leaders have vowed their own responses.

Ford of Ontario mooted the possibility of cutting off Canadian electricity supplies and exports of high-grade nickel to the US, as well as putting an export levy of 25% on electricity sent to power homes in Michigan, New York and Minnesota.

Canada exports enough electricity to power some six million American homes.

Ontario and other provinces have also moved to remove US-made liquor off their shelves. In Nova Scotia, Premier Tim Houston said his province will ban American companies from bidding on provincial contracts, as will Ontario.

Ford also announced that a C$100m ($68m; £55.1) contract with Elon Musk’s satellite internet company Starlink will be cancelled.

Meanwhile China – which now faces tariffs of 20% after Trump doubled an earlier levy – has vowed to fight any trade war to the “bitter end”. It has announced its own counter-measures – including tariffs on a range of US agricultural and food products.