Description: Canadian Federal government has drafted a $105 billion counter tariff bill on US products in case the Trump administration imposes additional tariffs on Canadian products. The proposed bill comes as a response to Trump’s threats of elevating tax obligations to Canada and abusing economic power to subdue Canada into economic dependency on the US. Canada’s main crude oil supplier Alberta had stated no intentions on cutting energy supply to the US, indicating on a divided front in context of the proposed tariff plan.
Impact: The US is risking worsening economic and diplomatic relations with Canada if and whether Trump’s tariff policies are implemented. Canada facing internal political challenges with Justin Trudeau stepping down as Prime Minister, could face difficulties in establishing a unified front regarding future economic policies towards the US. Divided opinion in the US political establishment could lead to a potential reasonable solution to the foreign economic tariff issue with Canada as opposed to a unilateral imposition on further debt obligations.