Canadian Prime Minister Justin Trudeau had a significant exchange with President-elect Donald Trump, where he voiced his worries about the adverse effects of Trump's proposed 25% tariff plan on the citizens of both the United States and Canada. This meeting at Mar-a-Lago occurred in the wake of Trump's announcement to increase tariffs on goods from Mexico and Canada, set to begin on the first day of his administration. Trudeau emphasized the concern that such tariffs could not only harm Canadians who have strong ties with the U.S. but would also raise prices for American citizens, potentially damaging American industry and businesses.
Following Trump's tariff announcement and the subsequent concerns raised by Trudeau, the two leaders engaged in a brief call that focused on border security and trade, with a senior Canadian government source describing the conversation as productive. The relationship between the U.S. and Canada has been strained, particularly on trade matters, during Trump's first administration, where tariffs were leveraged against Canada during negotiations surrounding the North American Free Trade Agreement. The challenge ahead lies in how Trump plans to implement the proposed tariffs without violating the USMCA agreement, as it remains uncertain.
Trump's rationale behind the tariff proposal was in response to what he termed an "invasion" caused by the growing number of individuals crossing the borders from Mexico and Canada into the U.S. Analysts have cautioned that Trump's tariff plan could have significant repercussions on trade flows, currency exchange rates, and consumer prices, especially considering that Mexico, Canada, and China collectively account for 43% of U.S. goods imports. As a response to the possible tariffs, Canada has reportedly begun to make preparations for potential retaliatory measures against U.S. goods, while analysts have highlighted concerns over the impact these tariffs could have on the dollar's strength and its implications for consumers and businesses alike.