1. Targeted Tariffs on Select US Goods
Canada has fought a trade war with Trump before, and it may do so again by imposing strategic tariffs on key US exports.
- Past Tactics: In 2018, Canada placed levies on Florida orange juice, bourbon from Kentucky, and other products linked to Trump’s political allies.
- Why It Works: This method avoids broad economic damage while pressuring US lawmakers.
- Challenges: Trump, now in his final term, may not be as politically vulnerable as before.
2. Dollar-for-Dollar Tariffs
Canada could match US tariffs dollar-for-dollar, hitting American goods at the same value as Trump’s tariffs.
- Potential Scope: Reports suggest Canada is preparing a $37 billion first round of tariffs, with an option to expand to $110 billion.
- Economic Risks: While this approach shows strength, it could increase inflation and recession risks. Some provinces, like Saskatchewan, oppose it due to potential economic harm.
3. The Energy ‘Nuclear’ Option
Canada supplies:
- 60% of US crude oil imports
- Electricity to 30 US states
Some Canadian officials, like Ontario Premier Doug Ford, have suggested cutting off energy exports to increase US fuel prices. - Why It’s Effective: Trump campaigned on lowering energy costs—higher gas prices could hurt his support.
- Challenges: Alberta, Canada’s oil-rich province, may resist, fearing economic fallout.
4. No Retaliation (For Now)
Some Canadian officials argue against retaliation, preferring to:
- Negotiate with the US to prevent tariffs.
- Introduce relief programs for affected businesses.
- Diversify trade beyond the US.
While this approach minimizes economic damage, critics say it shows weakness.
Bottom Line
If Trump follows through, Canada has strong countermeasures, but each comes with risks. Whether it chooses retaliation, negotiation, or economic diversification remains to be seen.