WASHINGTON — U.S. President Donald Trump will hit Canada with 25 per cent tariffs on Tuesday, with a lower 10 per cent duty for energy, government sources said — laying the foundation for a trade war with America's closest neighbours.
The federal government informed provinces Saturday that tariffs are coming, said the provincial sources, who cannot be named in order to share details that governments have not yet made public. It is not yet clear which energy exports would be included in the lower tariff category.
The premiers are having a first ministers' meeting with Prime Minister Justin Trudeau around 4 p.m.
The White House has not officially released any information about the tariffs, which could upend trade in North America, devastate the Canadian economy and trigger inflation in Canada and the United States.
“You see the power of the tariff," Trump told reporters Friday. "Nobody can compete with us because we have by far the biggest piggy bank."
The president travelled to his Mar-a-Lago resort in Florida Friday night and went to a golf course in West Palm Beach Saturday morning.
The federal government has said it has multiple options for retaliatory tariffs ready to deploy.
Trade Minister Mary Ng posted on social media Saturday, saying "our message is clear: while we value our partnership with the United States, Canada is ready to respond firmly to any U.S. tariffs."
Premiers have disagreed on how Canada should respond if Trump follows through on his threats.
Some say everything must be on the table, while Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe have said exports of oil and other resources like potash should not be included in retaliation plans.
The United States imported almost 4.6 million barrels of oil daily from Canada in October, according to the Energy Information Administration.
Earlier on Saturday, Ontario Progressive Conservative Leader Doug Ford reiterated his message for Canada to "hit back strong." Ford has used the tariff threat as a justification for his snap election call.
"To President Trump I can only say this: this is not a smart move. It's selfish," Ford said at an election campaign stop in Brampton, Ont.
"It not only hurts Canadians, it hurts your own people."
The tariffs will have immediate and direct consequences on Canadian and American livelihoods, said Canadian Chamber of Commerce President Candace Laing.
"This decision makes no sense when the majority of Americans oppose tariffs, when it harms businesses and workers on both sides of the border, and when the U.S. stock market is signalling that there's no appetite for disruption," Laing said in a statement Saturday.
The Canadian Federation of Independent Business said the tariffs are "deeply disappointing and will hit small businesses hard on both sides of the border."
The CFIB said in a statement that just over half of Canada's small businesses are involved in importing or exporting directly to the United States.
Trump, who linked the tariff threats to what he called the illegal flow of drugs and people across the border, didn't implement the duties against Canada on his first day back in office, as he'd promised to do. But the president did not back away from his tariff threat and repeatedly suggested the duties were still imminent.
Uncertainty caused by that looming threat has already stalled business investment, said Scott Crockatt at the Business Council of Alberta, earlier Saturday.
Crockatt cautioned the Canadian government against any “knee jerk” reaction that could hurt Canada further, including counter tariffs or embargoes on energy.
Unifor, Canada's largest private sector union, said Trump has declared a trade war and there needs to be swift retaliation.
"We will never forget this act of hostility against our workers, and we must take every measure possible — utilize every ounce of creativity we have — to build a strong, resilient, and diverse economy to never be held hostage by America again," Unifor National President Lana Payne said in a news release.
Foreign Affairs Minister Mélanie Joly, Public Safety Minister David McGuinty and Immigration Minister Marc Miller met with Republican officials, including Trump's border czar Tom Homan, in the United States capital throughout the week in a last-ditch attempt to avert the tariffs.
The ministers shared Canada's $1.3-billion border security plan, implemented to ease Trump’s concerns. Miller said they also explained facts about the small volume of people and drugs illegally crossing the Canada-U.S. border.
It's unlikely boosting the border would have made a difference to the president. Trump said Friday that there were no concessions that would stop Canada, Mexico or China from being hit with the levies.
Trump has said that the government should raise more of its revenues from tariffs, pushing aside concerns from economists that duties could stoke inflation after the Republican president campaigned on making life more affordable for Americans.
Scott Bessent, Trump's treasury secretary, has said the president utilizes tariffs in three ways: to remedy unfair trade practices; to raise revenue for the federal government, and as a negotiating tactic.
Experts have said the duties are likely a first step in Trump's plan to rattle Canada and Mexico ahead of a mandatory review of the Canada-U.S.-Mexico Agreement. The trilateral pact was negotiated to replace the North American Free Trade Agreement under the first Trump administration.
During negotiations in 2018, Trump floated the idea of a 25 per cent tariff on the Canadian auto sector, but it was never implemented. However, he did use his national security powers to impose a 25 per cent tariff on steel and a 10 per cent tariff on aluminum imports.
Canada and Mexico were eventually able to negotiate exemptions.
— With files from Aaron Sousa and Lisa Johnson in Edmonton, Joe Bongiorno in Montreal and The Associated Press
This report by The Canadian Press was first published Feb. 1, 2025.
Kelly Geraldine Malone, The Canadian Press