Trudeau’s government responds to US tariffs with sweeping trade measures

OTTAWA: The Canadian government announced a sweeping package of counter-tariffs against US-made products after President Trump confirmed his administration will go ahead with levies against Canada and Mexico on Tuesday.

“Canada will not let this unjustified decision go unanswered,” Prime Minister Justin Trudeau said in a statement.

The first stage is 25 percent tariffs on about C$30 billion ($20.6 billion) worth of goods from US exporters, and will go into effect at 12: 01 a.m. New York time unless the US drops its tariffs, he said.

A second round of tariffs at the same rate will be placed on C$125 billion of products in three weeks – a list that will include big-ticket items like cars, trucks, steel and aluminum.

“Our tariffs will remain in place until the US trade action is withdrawn and should US tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau added.

Trump to decide US tariff levels on Mexico, Canada as Tuesday deadline approaches

The Canadian dollar and stocks tumbled, with the benchmark S&/TSX Composite Index falling 1.5 percent the most since December 18. Traders in overnight swaps increased bets the Bank of Canada would cut interest rates by 25 basis points at its March 12 meeting, rising to nearly 80 percent from about a coin flip.

The Bank of Canada has warned that a prolonged tariff war has the potential to chop Canadian output by nearly 3 percent over two years and “wipe out growth” during that period. Demand for Canadian goods in the US would suffer, exporters would cut production and jobs, prices for products imported from the US would rise and consumers and businesses would spend less.

Trudeau’s government announced a C$1.3 billion plan to beef up border security by adding more aerial surveillance through helicopters and drones. It included a pitch for a new North America joint “strike force” to counter the fentanyl trade. The prime minister has also appointed a so-called fentanyl czar and increased the number of personnel available to patrol the border, and promised further measures to crack down on organised crime.