In response to President-elect Donald Trump’s threat to impose a 25% tariff on Canadian goods, Canada is readying retaliatory tariffs targeting a wide array of American-made products. The tariffs could include items such as orange juice, ceramics, steel products, and certain alcoholic beverages, as Ottawa seeks to push back against the proposed trade measures.

The looming trade conflict comes after Trump announced his plans to introduce the steep import tax on Canadian goods to pressure Canada to take stronger action on border security issues, particularly to curb the flow of illegal immigrants and drugs like fentanyl into the U.S. Canada is the United States' top trading partner, with the U.S. importing $419 billion in Canadian goods in 2023, ranging from lumber and cement to cars and minerals. Additionally, Canada is the largest foreign supplier of oil to the U.S.

Canada, in turn, is preparing a list of retaliatory measures that aims to target key products while minimizing the impact on Canadian consumers. The items under consideration include American glassware, pet food, and plastic products, among others. The move is seen as an effort to hit where it hurts politically, aiming to apply pressure on U.S. businesses while limiting direct economic harm to Canadian consumers.

While Canadian officials are preparing for the worst, they have not yet finalized the list of products that will face tariffs. Canadian businesses, including key CEOs, have been consulted by the government to gauge the impact and determine an appropriate response.

Prime Minister Justin Trudeau’s government is taking the threat seriously, with Foreign Minister Melanie Joly stating, “When President Trump talks, we listen, and we need to take him very seriously.” The government is reportedly consulting with business leaders and strategizing on the best approach to respond to the looming tariff conflict. As Canada’s largest trading partner, the U.S. imports a vast range of goods from Canada, including energy, automotive products, and raw materials, making a trade war potentially costly for both nations.

If the tariffs go into effect, it could lead to a full-scale trade war between the U.S. and Canada, one that would have far-reaching implications for global supply chains and prices for everyday consumer goods. Both countries are also closely intertwined in energy trade, with Canada being the largest foreign oil supplier to the U.S. Despite this, Trump has maintained that Canada must take stronger action on illegal immigration and drug trafficking or face serious economic repercussions.