Tariff Threats by Trump

Change in US government sparks unrest in Canada
Donald J. Trump was elected the 47th president of the United States of America in the general election held in the country on Tuesday, Nov. 5, 2024.
Soon after winning the elections, Radio Canada reported that on Monday, Nov. 25, Trump, on his Truth Social account, threatened that if Canada and Mexico do not stop “invasion” of undocumented immigrants and drugs crossing the US border, the US will impose a 25% tariff on all goods from the countries beginning on Jan. 20, 2025, his inauguration day.
“This tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all illegal aliens stop this invasion of our Country! […] Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!” Trump wrote on his social media platform Truth Social.
The threat caused a great amount of unrest in both countries due to its expected impact on trade relations and economies on both countries. Varied responses have been reported by the Premiers and Federal leaders of Canada.
CTVnews reported on Tuesday, Nov. 26, the value of the Canadian dollar dipped to its lowest since May 2020. According to these reports, the value of the Canadian dollar dipped to below 71 cents USD on the morning of Nov. 26 before jumping to 71.02 cents US later in the day.
The report mentioned that Robert Kavcic, senior economist for BMO Capital Markets said that the prospect of tariffs is “a pretty stiff headwind” for the Canadian Dollar which has already been under pressure due to Canada’s domestic economic factors. He believes that the Canadian dollar was weakening as it is due to the recent interest rate cuts by the bank of Canada and a softer economy.
CBC news reported that, within an hour of Trump’s announcement, Ontario Premier Doug Ford tweeted that “The Federal government needs to take the situation at our border seriously.” Ford also told CBC the following morning that it was “insulting” and “unfair” for Trump to name Canada and Mexico in the same sentence.
Alberta Premier Danielle Smith had similar opinions on the announcement. The Premier said she “has valid concerns related to illegal activities at our shared border,” to CBC.
The CBC report also talked about Federal Conservative Leader Pierre Poilievre’s response towards the threat. While Poilievre believes that Trump’s threats are “unjustified,” he also thinks Canada needs a leader with “brains” and a “backbone” and a leader who has a “Canada First” plan to deal with Trump’s return. Poilievre also said to the reporters that he will consider taking retaliatory measures, if necessary, in response to Trump’s threat.
Another report by CBC reported that the current US president Joe Biden hopes that Trump rethinks his plans to impose the tariff as he believes it would cause damage to the relationship between the countries.
“I hope he rethinks it. I think it’s a counterproductive thing to do […] We have an unusual situation in America — we’re surrounded by the Pacific Ocean, the Atlantic Ocean, and two allies: Mexico and Canada. And the last thing we need to do is begin to screw up those relationships,” said Biden to the reporters in Nantucket, Massachusetts, according to CBC.
CBC also reported that Canada’s current Prime Minister, Justin Trudeau spoke to Trump over a phone call after his announcement, outlining all the steps that Canada has already taken to address and improve the situation at the border and that the situation at Canada’s border is not as dire as Mexico’s. According to the report, Trudeau believes his conversation with Trump was a “good call” which helped in laying out the “facts.”
According to CBC, a phone call took place between Trump and Mexico’s President Claudia Sheinbaum. Sheinbaum said on Thursday that while she did not specifically discuss tariffs in her conversation with Trump, the two agreed upon maintaining good relations between the countries. Trump reportedly said that Sheinbaum had “agreed to stop migration through Mexico, and into the United States, effectively closing our Southern Border,” while Sheinbaum said she plans on laying out the strategies that attend to the immigrants before they cross the border.
The Guardian reported that the Federal Government of Canada and Premiers from 10 provinces have agreed to work together to address the threat by Trump.
The Guardian’s report also referred to an Associated Press report which cited a senior government official stating that Canada is already in the process of assessing retaliatory tariffs on certain items from the United States if Trump decides to follow through on his threat.
Outlining the effects of additional tariffs on Americans, the report stated that the decision of imposing tariffs will drive up fuel prices for America, as Canada is The US’s top crude oil supplier. Tariffs can upend the decades long oil-trade between the countries since Canadian oil imports are not protected from the levies under a free-trade agreement.
Trump’s threats, even those from before the beginning of his presidency, have caused major unrest amongst The US’s immediate neighbours. While it is yet to be seen whether or not Trump will follow up on his threats, the leaders of Canada and Mexico are apprehensive about Trump’s upcoming presidency.