How Canada Could Fight Back Against Trump’s Tariffs: Booze, Oil, and More
If the US imposes new tariffs on Canadian goods, Prime Minister Justin Trudeau says Canada will respond “forcefully and immediately.” According to the BBC, President Donald Trump plans to slap a 25% tariff on Canadian imports as soon as Saturday. Trudeau made it clear: “It’s not what we want, but if he moves forward, we will also act.”
Tariffs are taxes on imported goods, and Trump sees them as a way to grow the US economy and protect American jobs. But economists warn that these tariffs could hurt both countries—raising prices for Americans and dealing a heavy blow to Canada’s economy. Trudeau even warned Canadians to prepare for “difficult times” ahead.
So, how could Canada fight back? Here are four possible ways, based on insights from the BBC:
1. Targeted Tariffs on US Goods
Canada has been here before. When Trump imposed tariffs on Canadian steel and aluminium during his first term, Canada hit back with targeted tariffs on US products like Florida orange juice and Tennessee whiskey. These were chosen to send a political message, as they came from states with powerful Republican leaders.
This time, Canada might take a similar approach—targeting specific US goods to avoid widespread harm to its own economy. For example, Canada could tax products from states that support Trump, hitting him where it hurts politically. However, experts say this strategy might not work as well now, since Trump isn’t running for re-election.
2. Dollar-for-Dollar Tariffs
Another option is to match the US dollar-for-dollar. In the past, Canada imposed tariffs on US goods equal to the value of the tariffs the US placed on Canadian exports. This time, Canada is reportedly preparing to target $37 billion worth of US goods, with the possibility of expanding to $110 billion if needed.
But this approach isn’t without risks. Some Canadian leaders, like Saskatchewan’s Scott Moe, worry that broad tariffs could “rip this country apart.” Economists also warn that dollar-for-dollar tariffs could lead to inflation and even a recession in Canada.
3. The Energy “Nuclear” Option
Canada’s energy exports are a powerful weapon. The US relies heavily on Canadian oil and electricity—30 states get some of their power from Canada, and 60% of US oil imports come from its northern neighbor. Some Canadian leaders, like Ontario’s Doug Ford, have suggested cutting off energy supplies to the US to drive up prices at American gas pumps.
While this could hurt the US, it’s a risky move. Canada’s oil-rich province of Alberta has already refused to support energy taxes, arguing it would harm their economy. Still, experts say this option could “sting” the US, especially since Trump has promised to lower energy prices.
4. Pulling US Booze—Or Not Retaliating at All
Other ideas include pulling American-made alcohol from Canadian shelves, as suggested by Ontario’s premier. Alternatively, Canada could choose not to retaliate immediately. Instead, it could focus on negotiating with the US or supporting Canadian businesses affected by the tariffs.
Some experts believe Canada should use this as an opportunity to diversify its trade relationships and boost domestic production. As one economist put it, Canada is a “natural resource superpower” and could sell its products to other countries instead of relying so heavily on the US.
What Does This Mean for You?
If Trump’s tariffs go into effect, Canadians could face higher prices and economic challenges. But Canada has options to fight back—whether it’s targeted tariffs, energy restrictions, or other creative measures. The key question is: how far will Canada go to protect its economy?
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What do you think Canada should do? Should it hit back with tariffs, or focus on finding new trade partners? Share your thoughts below!
Credit to the BBC for their in-depth reporting on this topic.
https://www.bbc.com/news/articles/c93qnk92174o