Outgoing Canadian Prime Minister Justin Trudeau announced sweeping 25% retaliatory tariffs on C$30 billion ($22 billion) worth of U.S. imports on Tuesday, calling U.S. President Donald Trump’s tariffs on Canadian goods a “very dumb thing to do.”

Trudeau, who is set to step down at the end of the week, accused Trump of deliberately trying to ruin the Canadian economy and vowed further measures if necessary, threatening an additional C$125 billion ($91 billion) in tariffs within three weeks.

“There is absolutely no justification or need whatsoever for these tariffs,” Trudeau said at a press conference, confirming that Canada would challenge the U.S. actions at the World Trade Organization (WTO) and through the existing U.S.-Mexico-Canada trade agreement.

A Trade War Erupts

Trump’s decision to impose 25% tariffs on Canadian and Mexican imports—and 10% tariffs on Canadian energy—has sparked immediate economic and political fallout. Canada, which sends 75% of its exports to the U.S., now faces a major economic downturn if the tariffs remain in place.

Trudeau warned that both Canadians and Americans would suffer, citing a Wall Street Journal editorial that described Trump’s actions as “the dumbest trade war in history.” He directly addressed Trump:

“Donald, they point out that even though you’re a very smart guy, this is a very dumb thing to do.”

Trump quickly fired back on Truth Social, threatening to match any retaliatory tariff with an equivalent increase. U.S. Commerce Secretary Howard Lutnick later suggested that Washington could reach a compromise, stating, “I think he’s going to figure out, you do more, and I’ll meet you in the middle.”

Canadian Provinces Join the Fight

Provinces across Canada are taking their own measures to retaliate against the U.S.:

  • Ontario and Quebec have removed U.S. alcohol brands from provincial liquor store shelves.
  • Ontario Premier Doug Ford announced a 25% surcharge on electricity exports to New York, Michigan, and Minnesota—which powered 1.5 million U.S. homes in 2023—and hinted at cutting off supply entirely.
  • Ford also pledged to halt the sale of nickel and rare minerals to the U.S.
  • A boycott of American goods is gaining momentum, with Canadian hockey fans booing the U.S. national anthem at NHL games.

“We need to make sure America feels the pain,” Ford said.

Trudeau: ‘We Will Never Be the 51st State’

Trudeau’s relationship with Trump has deteriorated over time, with the U.S. president mockingly referring to Canada as the “51st state” and calling Trudeau its “governor” instead of prime minister.

The outgoing Canadian leader dismissed Trump’s complaints about fentanyl smuggling as “completely bogus” and accused him of appeasing Russian President Vladimir Putin while attacking Canada.

“What he wants to see is a total collapse of the Canadian economy because that will make it easier to annex us,” Trudeau said. “That is never going to happen. We will never be the 51st state.”

Economic Fallout and Next Steps

With financial markets reacting sharply, economists warn that Canada could be headed for a recession unless the tariffs are lifted quickly. The federal government is preparing emergency support for businesses and workers, including expanded employment insurance benefits.

Trudeau confirmed that he hopes to speak with Trump in the coming days, while Canada’s finance minister, Dominic LeBlanc, will soon unveil an initial relief package to mitigate the impact.