(Bloomberg) — Canada is set to introduce escalating retaliatory counter-tariffs to try to turn Americans against President Donald Trump’s 25% levies on Canadian goods, a threat that’s causing the country to rethink its dependence on its southern neighbor.
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“You will find when we do respond, at least initially, that we will focus on tariffing American goods that actually are sold in significant quantities in Canada, and especially those for which there are readily available alternatives for Canadians,” Natural Resources Minister Jonathan Wilkinson said in an interview on Friday, hours after Trump reiterated his plan to bring in tariffs on Canada, Mexico and China.
The comments imply that Canada’s first measures in a trade war would aim to insulate consumers while trying to dent US exporters’ income enough to create political pressure for US representatives and, ultimately, Trump.
Former Canadian Finance Minister Chrystia Freeland, a candidate to succeed Justin Trudeau as prime minister, suggested hitting Trump ally Elon Musk directly by applying a 100% tariff on Tesla Inc. electric vehicles.
Canada wants to avoid tariffs, but if Trump isn’t deterred, the levies will expand “stepwise,” and ministers are “not taking anything off the table in terms of options for the future,” Wilkinson said from his office in North Vancouver.
“That would include the potential for export tariffs on things like energy and critical minerals,” he said. That leaves open the possibility of levies to drive up the cost of oil and gas for US consumers and businesses, or iron ore used in American steel-making.
Wilkinson said the government will work with regional premiers — though Alberta’s conservative leader has opposed taxing exports of its crude, and it would be a politically difficult thing for the Canadian government to do. Energy is by far Canada’s largest export to the US.
Read more: The latest news and updates on Trump’s tariff plans
An early glimpse of the effect of Canada’s strategy could be seen Friday from Maine Senator Susan Collins. The Republican posted on X that tariffs would “impose a significant burden” on her state, noting that 95% of the heating oil that’s widely used in Maine is refined in Canada, and the country also provides all the jet fuel and diesel for the Bangor airbase in the state.
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