Trade Tensions Escalate: Canada Prepares to Retaliate Against US Tariffs
As the new administration takes office, Canada is bracing itself for a potential trade war with the United States. Mary Ng, Canada’s minister of international trade, has warned that Ottawa is prepared to impose retaliatory tariffs on US goods if President-elect Donald Trump follows through on his threat to impose a 25% blanket tariff on all Canadian exports.
Aiming at the Energy Sector
Ng has refused to rule out an export tax on Canadian oil and gas bound for the United States, stating that “everything is on the table.” This move could have significant implications for the energy sector, as Canada is a major supplier of oil and gas to the US. Ng emphasized that such a move would ultimately make things more expensive for Americans, citing the example of Canadian electricity powering Broadway lights in New York.
Drafting a List of US Exports
Ng and her team are currently compiling a list of US exports to Canada that could be subject to additional tariffs in the event of escalating trade tensions. This list is likely to include a wide range of products, from everyday items like candy bars to more significant imports like military hardware.
Diversifying Trade Partners
In light of the potential trade war, Ottawa is seeking to diversify its trade partners and reduce its reliance on the US market. Ng has emphasized the importance of pursuing opportunities with other countries, including Japan and the European Union. This strategy is aimed at mitigating the impact of any trade restrictions imposed by the US.
A History of Retaliation
This is not the first time Canada has faced tariff threats from the US. During Trump’s first term, Ottawa responded to tariffs on Canadian steel and aluminum exports by imposing retaliatory levies on US products like beef, chocolate, and ketchup. Canada deliberately targeted products from politically potent places, aiming to put pressure on US elected representatives to resolve the tensions.
Seeking Common Ground
This time around, Ng has expressed a desire to “find more common ground” with the US before any escalation. Ottawa is also working to better secure the border between the two countries, which could help Trump fulfill a key campaign pledge.
Collaboration and Cooperation
Increasing collaboration between Canada and the US could include buying more from the United States, according to Kirsten Hillman, Canada’s ambassador to the US. This could involve purchasing more military equipment, such as fighter jets and drones. Ng has emphasized the importance of building a stronger North American economy through cooperation and mutual benefit.
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