In response to the potential imposition of 25 percent tariffs on Canadian imports by US President-elect Donald Trump, Canadian Foreign Minister Melanie Joly issued a stark warning on Friday. Joly described the proposed tariffs as a "Trump tariffs tax" that could trigger the biggest trade war between Canada and the US in decades. The US president-elect's plans also involve increasing customs duties on other countries, including Mexico and China, in his broader economic and foreign policy initiatives.

"We are ready to put maximum pressure," Joly said, emphasizing Canada's preparedness to react strongly to any trade war initiated by the US. The Canadian government has already devised a series of retaliatory measures aimed at goods from the United States, including products like steel, ceramics, glassware, and even orange juice. The government also indicated the potential for phase two tariffs if the situation escalates.

Prime Minister Justin Trudeau echoed Joly's sentiments, emphasizing that Canadian jobs and consumers would be significantly affected by the tariffs. He warned that imposing such duties would not only harm Canada but also risk American jobs, raise prices for American consumers, and endanger North American security.

Experts like those from Scotiabank suggest that a full-fledged trade war could have severe economic consequences, potentially causing a five percent contraction in Canadian GDP, rising unemployment rates, and spurring inflation in both countries. The escalating trade tensions between the US and Canada are now a key point of concern for policymakers and economists, with both sides bracing for a significant economic impact if the tariffs are implemented.