If the president is elected Donald Trump follow through on his threat impose tariffs on Canadian goodsOttawa is ready to retaliate with tariffs that could hit the energy sector, Canadian International Trade Minister Mary Ng said Thursday.
“Everything is on the table,” Ng told a global markets reporter Seema Mody on CNBC’s “Squawk on the Street.”
This includes dollar-for-dollar retaliation. Canada’s trade chief also refused to rule out a tax on exports Canadian Oil and Gas en route to the United States.
“I actually don’t think the Americans want us not to sell electricity, oil and gas to America, because you know, I’m here in New York, Broadway lights, most of it is Canadian electricity,” Ng said.
“If you’re going to put tariffs on Canada, what it’s actually going to do is make things more expensive for Americans,” she added.
Trump threatened a 25% general tariff on all Canadian exports when the takes over Monday. The threat is similar to that directed at Mexico, three parties to the USMCA trade agreement. Trump also talked about raising tariffs on Chinese imports by 10%.
Canada and the United States have a trade relationship that is virtually unparalleled. In 2022, Canada was the biggest customer of American goods and the third largest exporter of goods to the USA
Ng and her team are currently compiling a list of US exports to Canada that could face additional tariffs if trade tensions escalate. “Everything will be on the table,” she said.
President Donald Trump and Canadian Prime Minister Justin Trudeau shake hands during a meeting ahead of the NATO summit in Watford, London, Britain, December 3, 2019.
Kevin Lemarque | Reuters
The same is true for Canadian goods entering the United States.
“You can be pretty sure of that if you buy something [at a] supermarket… think about the candy bar. There’s probably a Canadian there. So if you pay $4 today, you might pay $5 tomorrow,” Ng said.
The potential threat of a looming trade war with the United States is also encouraging Ottawa to continue working with the rest of its trading partners around the world, including Japan and the European Union.
“I’ve always had a mandate as Canada’s Department of Commerce to diversify,” Ng told CNBC. “It’s really great for us to be working with America, but, absolutely, we also have to look for opportunities around the world. And we’re doing that.”
This is not the first time that Trump has used threats of tariffs in an attempt to restart trade talks with America’s northern neighbor.
During his first term, Trump imposed tariffs on Canadians export of steel and aluminum in the USA
The move prompted Ottawa to speak up retaliatory charges to American products such as beef, chocolate, ketchup and others.
At the time, Canada did not hide it selection criteria for which American exports should be hit with additional tariffs. Prime Minister Justin Trudeau’s government has deliberately chosen products from politically powerful places, such as battleground states and those with powerful representatives in Congress.
The idea was that any negative economic effects resulting from a decline in exports would be felt most acutely by people in the communities that produced or grew the produce. They would in turn put additional pressure on their elected representatives in Washington – including Trump, who is running for a second term – to defuse tensions.
President Donald Trump welcomes Canadian Prime Minister Justin Trudeau at the White House in Washington, U.S., on June 20, 2019.
Jurij Gripaš | Reuters
This time, Ng said Canada wants to “find more common ground” before any escalation. She also said Ottawa is working to better secure the US-Canada border. That could help Trump fulfill a key promise he made during the campaign.
“I think we have a unique opportunity right now for Canada and the United States to work together to build an even stronger economy, a stronger North American economy,” Ng said.
Increasing this cooperation could include buying more from the United States, said Kirsten Hillman, Canada’s ambassador to the United States Associated Press on Monday. Seventy percent of Canada’s military equipment is sourced from the US, Hillman said.
When it comes to buying additional military equipment, “everything is on the table,” Ng told CNBC, from fighter jets to drones.
Canada is currently in the midst of a leadership change. Prime minister Justin Trudeau resigned at the beginning of this month. Trudeau’s resignation comes just weeks after his former ally and deputy prime minister Chrystia Freeland also stepped down.
IN announcing her resignationFreeland, who was also the country’s finance minister, cited differences with Trudeau over the direction of Canada’s trade policy toward the United States.
