Canadian Prime Minister Justin Trudeau could speak to President-elect Donald Trump about the potential negative impacts of his proposed 25% tariff plan on American and Canadian citizens.
What Happened: Trudeau and Trump had a high-stakes dinner at Mar-a-Lago on Friday, reported CNN, citing a source familiar with the meeting.
This meeting is taking place shortly after Trump announced his plans to significantly increase tariffs on goods from Mexico and Canada, starting from the first day of his administration.
During a morning conference, Trudeau voiced his concerns, stating, “Our responsibility is to point out that in this way he would be actually not just be harming Canadians, who work so well with the U.S.; he'd actually be raising prices for American citizens as well and hurting American industry and businesses.”
Trump’s proposed tariffs could disrupt America’s supply chains and industries that rely on goods from its closest trading partners.
The two leaders had a brief call focused on border security and trade after Trump’s announcement, which a senior Canadian government source described as productive, the report noted.
During Trump’s first administration, the U.S. and Canada had a strained relationship, especially on trade issues.
Trump used tariffs against Canada during negotiations over replacing the North American Free Trade Agreement. It remains unclear how Trump plans to implement the proposed tariffs without violating the USMCA.
Why It Matters: Trump’s tariff announcement came in response to what he described as an “invasion” due to the increasing number of people crossing the borders from Mexico and Canada into the U.S.
According to Goldman Sachs, Trump’s tariff proposal could cause significant fallout for trade flows, exchange rates, and consumer prices. Mexico, Canada, and China collectively make up 43% of U.S. goods imports.
In response to Trump’s threats, Canada has also reportedly started preparing for potential retaliatory tariffs on U.S. goods.
Analysts have also warned that the proposed tariffs could lead to a stronger dollar, affecting consumers and businesses alike.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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