Prime Minister Justin Trudeau has warned that Canada is prepared to retaliate if U.S. President-elect Donald Trump follows through on his plan to impose a 25% tariff on imports from Canada. Speaking at a meeting in Toronto, Trudeau made it clear that Canada would not hesitate to respond, stating, "everything is on the table."

Foreign Affairs Minister Mélanie Joly, currently in Washington, met with U.S. Republican leaders and said that such tariffs would trigger a "trade war" between the two countries. She emphasized that Canada would act swiftly and forcefully if necessary, calling it the largest trade conflict between the two nations in decades. 

Canada has multiple retaliatory measures ready, with some government sources revealing that tariffs worth up to $37 billion could be imposed, potentially followed by an additional $110 billion, depending on the specifics of Trump's tariff order. However, if the tariffs are lower than anticipated, Canada's response will be more moderate. The Canadian government is awaiting the exact wording of Trump’s executive order before finalizing their response.

Energy Minister Jonathan Wilkinson, who met with U.S. officials, highlighted that even Republican senators were unclear about the full impact of the proposed tariffs. There are reportedly three options being considered: 25%, 10%, or a gradually increasing tariff.

While most Canadian premiers presented a unified front, Alberta Premier Danielle Smith broke ranks, ruling out tariffs on oil exports. Former finance minister Chrystia Freeland has suggested a dollar-for-dollar tariff response, which Trudeau has supported.

Joly noted that many in Washington are unaware of the significant economic damage these tariffs could cause. A Canadian Chamber of Commerce report suggests that a 25% tariff could reduce Canada's GDP by 2.6% and the U.S. by 1.6%, severely disrupting key industries like automotive, agriculture, and energy. The Canadian Labour Congress also expressed concern over job losses, calling for cooperation between government, business, and labour to navigate the potential fallout.