Canada considering retaliatory tariffs on US items following Trump threat

Canada is already examining possible retaliatory tariffs on certain items from the United States should US president-elect Donald Trump follow through on his threat to impose sweeping tariffs on Canadian products, a senior official said on Wednesday.

Trump has threatened to impose tariffs on products from Canada and Mexico if the countries do not stop what he called the flow of drugs and migrants across southern and northern borders. He said he would impose a 25 per cent tax on all products entering the US from Canada and Mexico as one of his first executive orders.

A Canadian government official said Canada is preparing for every eventuality and has started thinking about what items to target with tariffs in retaliation. The official stressed no decision has been made. The person spoke on condition of anonymity as they were not authorised to speak publicly.

When Trump imposed higher tariffs during his first term in office, other countries responded with retaliatory tariffs of their own. Canada, for instance, announced billions of new duties in 2018 against the US in a tit-for-tat response to new taxes on Canadian steel and aluminium.

Many of the US products were chosen for their political rather than economic impact. For example, Canada imports US$3 million worth of yogurt from the US annually and most comes from one plant in Wisconsin, home state of then-House Speaker Paul Ryan. That product was hit with a 10 per cent duty.

Another product on the list was whiskey, which comes from Tennessee and Kentucky, the latter of which is the home state of then-Republican Senate leader Mitch McConnell.