Canada should stop playing defence on Trump’s tariff threat, minister says

By Canadian Press on January 21, 2025.

WASHINGTON — Canadian officials are adopting a different tone after President Donald Trump ordered a study of the United States’ trade relationship with Canada, pushing the threat of devastating tariffs down the road — temporarily.

“We need to move from a defensive position to offensive in the sense that we have a lot of good things to put on the table in that discussion,” Industry Minister François-Philippe Champagne said at the cabinet retreat in Montebello, Que., on Tuesday.

Trump signed the America First Trade Policy after his return to the Oval Office Monday evening, providing Ottawa with some insights into his tariff agenda after months of political anxiety.

The memorandum orders multiple federal agencies to study trade policies and trade deficits. It directs the secretary of commerce and the secretary of homeland security to assess migration and fentanyl flows from Canada, Mexico and China and recommend “appropriate trade and national security measures to resolve that emergency.”

The move ostensibly gives Canada more time and information to make the case against Trump’s promised 25 per cent across-the-board tariffs.

But Trump wasn’t backing away Monday night, suggesting to reporters that he might hit Canada and Mexico with the tariffs on Feb. 1. It’s not clear if that date holds any significance; Trump’s order says that the report on trade with Canada is not due until April 1.

Kirsten Hillman, Canada’s ambassador to the U.S., said the memorandum provides Canadian officials with a framework and key department contacts to allow them to make the case against the tariffs.

“We have now moved from a more abstract discussion with the Trump administration to a very concrete discussion,” Hillman said at the cabinet retreat. “That document lays out priorities, it lays out areas of study that are very important to him for his fulfilment of his trade and economic agenda. It’s very detailed.”

Trump remains concerned about America’s border security, Hillman said. She cautioned people not to focus on Trump’s choice of words Monday, when he called Canada “a very bad abuser” in relation to migrants and illegal drugs crossing into the United States.

It is a distraction tactic, she said, and Canada should instead look to where Trump’s priorities intersect with those of Canada in areas like energy, trade and Arctic security.

The debate over Canada’s options for retaliatory tariffs has opened up divisions among federal and provincial leaders.

Ontario Premier Doug Ford initially suggested cutting off energy flows to the U.S. but has since appeared on American news programs promoting a “Fortress Am-Can” strategy intended to deepen the resource alliance between the two countries.

Alberta Premier Danielle Smith caused controversy last week when she refused to endorse a joint statement with the other premiers and Prime Minister Justin Trudeau that said every possible countermeasure would be on the table.

Premier Smith, who was in Washington for Trump’s inauguration, said Monday that Canada can form a “perfect partnership” with the U.S. to provide oil and gas at stable prices, allowing the Americans to focus on boosting their own energy exports.

While Trudeau said again Tuesday that every retaliatory option remains on the table, his ministers and Hillman have turned their focus to how Canada can support some of the Trump administration’s goals.

Champagne, who attended Trump’s swearing-in ceremony on Capitol Hill Monday, said he reminded American lawmakers and leaders of the role Canada plays in supply chain resiliency, particularly for the critical minerals and semiconductors needed by the defence sector.

“Let’s not look at threats but opportunities,” he said.

“I don’t know anything that the Americans buy from Canada by politeness,” he added. “They buy from Canada because they need it.”