Trudeau has announced retaliatory tariffs amounting to $30 billion, with an additional $125 billion planned within 21 days. Canada will also file challenges under the USMCA and WTO, while discussions about non-tariff measures are ongoing with provinces.
He emphasised that Canada does not desire a trade war, arguing that the US government risks American jobs and sabotages its own agenda. Trudeau claimed that the legal basis for tariffs concerning fentanyl is inaccurate, as less than 1% of fentanyl and illegal immigration originates from Canada.
Canada’s Fentanyl Commitment
Statistics indicate a 97% drop in fentanyl flows from December to January, affirming that Canada has met its commitments. Trudeau expressed the challenges Canadians will face, promising additional support and maintaining that these tariffs should be temporary.
The announcement highlights a direct response to the measures imposed by the U.S. administration, showcasing that Ottawa is not retreating from economic confrontation. The scale of the planned countermeasures should not be underestimated. An initial $30 billion tariff package is already set, with a much larger wave—an additional $125 billion—expected within three weeks. These actions are not taken in isolation; legal avenues through the USMCA and WTO will also be pursued. Provincial governments are engaged in discussions regarding alternative methods that do not rely on direct tariffs.
Trudeau has made clear that Canada is not seeking economic conflict. Instead, he frames these tariffs as a necessity, arguing that the White House is ultimately undermining its own labour force and economic priorities. His remarks directly challenge the justification provided by Washington, particularly the claim that fentanyl and migration concerns warrant such measures. He presents data to discredit the reasoning behind the U.S. decision, pointing to a 97% reduction in fentanyl flows from December to January.
This shift in numbers is not insignificant. From a trading perspective, this suggests that Canada has fulfilled its pledged commitments on border controls. If these figures hold under further scrutiny, the narrative from the United States appears weaker when backed by empirical evidence. In response, assurances have been made that domestic support will be provided to those affected, reinforcing that these measures should not be treated as permanent.
Economic Adjustments And Market Reactions
For those closely monitoring price movements in the coming weeks, the immediate focus should be on reactions from Washington. There is no ambiguity in the scale of the measures, meaning response strategies will be developed swiftly. The timeline for the next wave of tariffs is clear, which provides some predictability in an otherwise volatile situation. The legal disputes under the stated agreements introduce potential delays, though market participants should not expect resolution through litigation alone.
This is not a theoretical confrontation; practical effects are already emerging. Importers and exporters will make adjustments, adding pressure on policymakers and industries alike. The determination to establish economic leverage on both sides is evident. The stated intention to limit the duration of these tariffs suggests that outcomes in negotiations could shift the timeframe, but that remains dependent on the ability of either side to recalibrate its stance based on economic repercussions.
