With less than two weeks until he moves back into the White House, Donald Trump is laying the groundwork for a potential trade war with Canada.
Driving the news: Despite the U.S. economy handily outperforming the rest of the G7, president-elect Donald Trump is considering declaring a national economic emergency, according to CNN — a move that would make it easier to roll out a suite of new tariffs.
- By declaring a national emergency, Trump would get unilateral power to slap tariffs on allies without needing to prove the hikes are necessary for protecting national security.
Why it matters: The threat of annexing Canada through economic force might be more bark than bite, but Trump’s promise to slap 25% tariffs on Canadian goods — a threat that was widely seen as a negotiation tactic initially — is now close to becoming a reality.
- Canadian officials have already prepped a list of retaliatory tariffs against the U.S. and are considering releasing them before Trump even takes office.
- If Ottawa does retaliate with tariffs of its own, Scotiabank modelling shows that the Canadian economy could shrink by a whopping 5.6%.
Zoom out: To try and stave off a tit-for-tat tariff war, Ontario Premier Doug Ford spent yesterday pitching the U.S. on an expanded energy partnership that would boost energy exports down south and further integrate the two countries' electrical grids.—LA