OTTAWA — U.S. President Donald Trump threatened to escalate the trade war he launched with Canada even further Tuesday, just hours after his first punishing round of import taxes on all Canadian goods took place.
Prime Minister Justin Trudeau called Trump's imposition of a 10 per cent tariff on Canadian energy and 25 per cent tariffs on all other Canadian goods "dumb" and said Canada is fighting back.
"Now, it's not in my habit to agree with the Wall Street Journal, but Donald, they point out that even though you're a very smart guy, this is a very dumb thing to do," Trudeau said at an Ottawa press conference, addressing Trump directly by his first name.
He said Canada is immediately introducing 25 per cent retaliatory tariffs on $30 billion worth of American products, and will expand them to cover another $125 billion in U.S. goods in 21 days.
Trump then responded to Trudeau's remarks, threatening to introduce even more tariffs on Canada in a post on Truth Social, the social media platform he owns.
"Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!" Trump wrote, referencing his repeated insistence that Canada would be better off if it just becomes a U.S. state.
Trudeau also said that Canada will file claims with the World Trade Organization and through the Canada-U.S.-Mexico Free Trade Agreement to push back on the U.S. tariffs.
The tariffs were framed initially as a U.S. response to fentanyl trafficking and border security. Trudeau said that Canadian efforts on border security have been "well received" by American officials and Trump has lost his legal pretext for starting an "unjustified" trade war.
"The one thing (Trump) has said repeatedly, that what he wants is to see a total collapse of the Canadian economy, because that will make it easier to annex us," Trudeau said, adding Canada will never become a U.S. state.
"He can do damage to the Canadian economy and he started this morning. But he is rapidly going to find out, as American families are going to find out, that that's going to hurt people on both sides of the border."
In an earlier post on Truth Social Tuesday, Trump said if companies move to the U.S., they won't face the tariffs.
Trudeau said that opponents like Russia want to see normally friendly nations fighting each other.
"So today, the United States launched a trade war against Canada, their closest partner and ally, the closest friend," he said.
"At the same time, they're talking about working positively with Russia, appeasing (Russian President) Vladimir Putin, a lying, murderous dictator. Make that make sense."
The prime minister said he would like to see how American citizens feel about the Trump administration "jettisoning" friends and allies in favour of "a country that has never wished Americans well and continues to act in ways that harm the global economy, and specifically the American economy and American values."
Trudeau said the federal government will be there to support Canadians through measures like enhancing employment insurance "no matter the cost." He did not announce specific measures to protect weakened Canadian businesses from potential takeovers.
The president's executive order hitting Canada and Mexico with the across-the-board tariffs took effect at 12:01 a.m. ET.
Stock markets in Canada and the U.S. fell at the start of trading Tuesday, continuing the plunge that began late Monday after Trump confirmed tariffs were coming.
As of early Tuesday afternoon, the S&P/TSX composite index was down 442.97 points at 24,558.60.
In New York, the Dow Jones industrial average was down 601.29 points at 42,589.95. The S&P 500 index was down 69.14 points at 5,780.58, while the Nasdaq composite was down 110.95 points at 18,239.24.
Trudeau said that he will be meeting with the premiers Tuesday afternoon to talk about potential non-tariff responses. Trudeau said some provinces are looking at blocking American companies from bidding on publicly funded contracts. Quebec Premier François Legault said his province will impose penalties on U.S. companies that bid on provincial government contracts and Ontario Premier Doug Ford is banning American companies from bidding on provincial contracts altogether.
Ford also said he will be imposing 25 per cent export tariffs on electricity the province ships to the United States, and will cut off those exports altogether if Trump's tariffs remain in place into April.
Quebec, Ontario, New Brunswick and Manitoba are removing American booze from provincial liquor store shelves.
"I've spoken to governors, senators, congressmen and women from every region, both Democrats and Republicans, they know, they tell me these tariffs are a massive mistake," Ford said Tuesday.
Canadian officials and premiers made a month-long diplomatic push in Washington after Trump originally signed the executive order, which tied the duties to the illegal flow of people and drugs across the northern border.
U.S. Customs and Border Protection data shows the number of people and drugs crossing illegally into the United States from Canada is minuscule compared to the volume coming across the southern border. It reports just 13.6 grams of fentanyl seized by northern Border Patrol staff in January.
Conservative Leader Pierre Poilievre said that the federal government should have been doing more to fight fentanyl trafficking and secure the border without pressure from Trump.
Poilievre added that the government should treat counter-tariffs as a means to reduce taxes.
"The obvious place to start is to get rid of the Liberal carbon tax, then axe the sales tax on new homes. We need to reverse the Liberal capital gains tax hike and slash income tax so that hard work pays off," Poilievre said.
He added that Canada should fast-track pipeline projects to get natural resources like liquefied natural gas to non-American markets and remove "all red tape" on home building to boost Canadian softwood lumber demand.
Trump said he also plans to implement 25 per cent tariffs on all steel and aluminum imports coming into the U.S. on Mar. 12. These duties would be imposed on top of any existing tariffs.
— With files from Kelly Malone in Washington, Lauren Krugel in Calgary, Catherine Morrison and Craig Wong in Ottawa and The Associated Press
This report by The Canadian Press was first published March 4, 2025.
David Baxter, The Canadian Press
