Canada is looking to target American steel, ceramics, plastics and orange juice with retaliatory tariffs in response to threats of hefty duties on Canadian imports by the incoming Trump administration.
A senior government official said Ottawa has made no decisions yet on retaliation, and is not prepared to share the full list of items under consideration.
The selective release of certain retaliation plans comes just a week and a half before incoming U.S. president Donald Trump's inauguration, and a week before Trudeau and the premiers meet in Ottawa next Wednesday to discuss Canada's response plan, which includes retaliatory tariffs.
Trump has threatened to impose 25 per cent across-the-board tariffs on imports from Canada and Mexico as one of his first orders of business when he is sworn in on Jan. 20.
Experts said it's the right move for Canada to signal that it's prepared for a fight, since the country would surely lose a wider trade war and risk escalation if Ottawa threatened similar across-the-board tariffs.
Laura Dawson, a trade expert and executive director of the Future Borders Coalition, said it's a decision Ottawa no doubt made reluctantly because Canada has a lot of economic exposure and tariffs are ultimately paid for by consumers and importers.
"By leaking or sharing or hinting about what's on the list, it's trying to signal to the White House that Donald Trump's tariffs will be costliest to Americans," she said.
CBC News first reported this week that a draft list was circulating among a small group of top officials in Prime Minister Justin Trudeau's government, including by targeting Florida's orange juice.
"The strategy that trade officials take when devising these retaliation lists is that you want to find products that are iconic, that will be recognizable," Dawson said. "That's why they pick things like orange juice because it's something that people can easily understand, and it's something that's localized to a region that Trump cares a great deal about, and that's Florida voters."
But she also said Canada can't slap tariffs on items with such surgical precision, since it's done by product categories. Ottawa can levy tariffs on orange juice, but not something so specific as only Minute Maid or orange juice from Florida without also hiking prices on juice made in California and other states.
Canada’s Premiers will travel to Washington DC on February 12 to meet with Republicans and Democrats about the harm tariffs will cause both sides of the border.
— David Eby (@Dave_Eby) January 8, 2025
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Matthew Holmes, executive vice president at the Canadian Chamber of Commerce, said floating targeted items is a better move than making a full-on blanket threat of across-the-board tariffs, which could invite escalation and kick off a trade war Canada can't win.
"You never want to get into a full competition with the U.S. Treasury," he said. "The scope and scale of their market, their depth of internal trade is a very different economy than the one Canada has, which is premised largely on import/export trade. We're not going to win if it's a pure war of attrition."
When asked to respond to Canada prepping its retaliatory tariff list, the Trump team said the tariffs are in the best interest of U.S. consumers.
“President Trump has promised tariff policies that protect working Americans from the unfair practices of foreign companies and foreign markets," said Brian Hughes, a spokesperson for the Trump-Vance transition team. "As he did in his first term, he will implement economic and trade policies to make life affordable and more prosperous for our nation, while simultaneously levelling the playing field for American manufacturers.”
Canada announced in December a $1.3-billion plan to beef up border security in response to Trump's tariff threats, but that has not deterred Trump, who doubled down on his rhetoric this week.
Canada fought back against U.S. steel and aluminum tariffs during Trump's first term by targeting specific American products like playing cards, ketchup and bourbon to put political pressure on Trump and key Republicans.
Holmes said Canada needs to sell Trump's tariff threat as a "tax on everyday Americans" and target specific supply chains or states that will be critical to Trump in the midterm elections in two years time.
But the midterms, set for November 2026, also give Trump a long runway. The U.S. is still bearing some of the costs of tariffs from Trump's first term, such as those levied on Chinese imports which President Joe Biden didn't remove.
"They can go deep, they can go long. It's really how much the American consumer is willing to tolerate in terms of the affordability prices they're facing because this will up costs," Holmes said.
