Report: Canadians Are Looking at Retaliatory Tariffs

Canada is already examining possible retaliatory tariffs on certain items from the United States should President-elect Trump follow through on his threat to impose sweeping tariffs on Canadian products, a senior official said Wednesday. The official, speaking to the AP on condition of anonymity, said Canada is preparing for every eventuality and has started thinking about what items to target with tariffs in retaliation. The official stressed no decision has been made.

• Trump has threatened to impose tariffs on products from Canada and Mexico if the countries don't stop what he called the flow of drugs and migrants across southern and northern borders. He said he would impose a 25% tax on all products entering the US from Canada and Mexico as one of his first executive orders.

• When Trump imposed higher tariffs during his first term in office, other countries responded with retaliatory tariffs of their own. Canada, for instance, announced billions of dollars in new duties in 2018 against the US in a tit-for-tat response to new taxes on Canadian steel and aluminum.
• Canada is the top export destination for 36 US states. The challenge will be to "find some iconic US item … that would resonate with Trump's supporters, or the constituencies he cares about, which if Canada put tariffs on them, it will get a lot of notice in the US," Gary Hufbauer at the Peterson Institute for International Economics tells the CBC.
• Canadian officials say lumping Canada in with Mexico is unfair but say they are ready to make new investments in border security and work with the Trump administration to lower the numbers from Canada. The Canadians are also worried about an influx north of migrants if Trump follows through with his plan for mass deportations.

• Prime Minister Justin Trudeau held an emergency virtual meeting on Wednesday with the leaders of Canada's provinces. He stressed they need to present a united front. "We agreed that we need to be smart, strong, and united in meeting this challenge," Deputy Prime Minister Chrystia Freeland said, per the Guardian. Ontario Premier Doug Ford said he also met with officials including US DEA agents on Wednesday to discuss securing the border.
• Trump posted Wednesday evening on Truth Social that he had a "wonderful conversation" with new Mexican President Claudia Sheinbaum and she "agreed to stop Migration through Mexico." "Mexico will stop people from going to our Southern Border, effective immediately. THIS WILL GO A LONG WAY TOWARD STOPPING THE ILLEGAL INVASION OF THE USA. Thank you!!!" Trump posted. It was unclear what impact the conversation will have on Trump's plan to impose tariffs.

(More tariffs stories.)