The dark paneled Cabinet room at Rideau Hall echoed with urgent murmurs as Finance Minister Chrystia Freeland checked her buzzing phone for the fifth time. I’ve witnessed similar scenes in diplomatic hubs from Brussels to Ankara, but rarely with this level of contained anxiety on home soil.
“President-elect Trump’s proposal for a universal 10% tariff on imports and 60% on Chinese goods isn’t just campaign rhetoric anymore,” said a senior trade official who requested anonymity to speak freely. “We’re looking at potentially devastating impacts for Canadian manufacturing and resource sectors.”
Industry Minister François-Philippe Champagne arrived late, fresh from calls with automotive executives in Ontario. The faces around the table reflected the gravity of the situation that prompted Prime Minister Mark Carney to convene this emergency meeting with provincial premiers and key cabinet members.
Trump’s victory was barely 72 hours old when he doubled down on his tariff promises. For Canada, which sends approximately 75% of its exports to the United States – valued at roughly $400 billion annually – the stakes couldn’t be higher. The Bank of Canada estimates that such tariffs could slash Canadian GDP growth by up to 1.5 percentage points.
“We’ve been here before, but not quite like this,” remarked Quebec Premier François Legault as he settled into his chair. During Trump’s first administration, Canada weathered steel and aluminum tariffs, but the scope of the threatened measures now dwarfs previous trade tensions.
What makes this round particularly concerning is the economic context. Canada’s economy has been sputtering with growth at just 1% according to Statistics Canada‘s latest figures. Housing costs have soared 22% nationwide since 2021, while household debt sits at record levels. This economic fragility leaves little buffer against trade shocks.
Behind closed doors, sources say the federal government is developing a three-pronged strategy: diplomatic engagement with Trump’s transition team, preparations for potential WTO challenges, and targeted support for vulnerable industries. The Canada-U.S.-Mexico Agreement (CUSMA) provides some procedural protections, but experts note these can be circumvented through national security provisions.
“We shouldn’t underestimate the complexity of these negotiations,” cautioned Scotty Greenwood, CEO of the Canadian American Business Council. “Canada needs to position itself as part of the solution to American economic concerns, not just another trading partner seeking exemptions.”
Carney, the former Bank of Canada and Bank of England governor who took office just months ago, brings unique financial credibility to these discussions. In the Cabinet room, he emphasized both preparation and proportion.
“We need contingency plans across all sectors, but we also need to maintain perspective,” a source quoted Carney saying. “Not every campaign promise becomes policy, and we have deep institutional relationships that transcend any administration.”
Alberta Premier Danielle Smith advocated for leveraging Canada’s energy resources as a negotiating tool, highlighting that Canada supplies approximately 61% of all U.S. crude oil imports according to the U.S. Energy Information Administration. “Energy security is national security,” Smith reportedly stated, suggesting American dependency on Canadian resources could provide bargaining power.
Meanwhile, BC Premier David Eby focused on potential vulnerabilities in lumber and agricultural products, industries that employ thousands in his province and have historically been flashpoints in trade disputes.
Outside official channels, I spoke with workers at an auto parts manufacturer in Windsor, Ontario, where uncertainty hangs heavy. “We just invested $40 million in new equipment to supply Michigan assembly plants,” said production manager Sanjay Mehta. “If these tariffs go through, that investment could be underwater almost immediately.”
The Automotive Parts Manufacturers’ Association estimates that 150,000 Canadian jobs could be affected by severe disruptions to integrated supply chains. With components sometimes crossing the border multiple times during production, the cumulative effect of tariffs could make entire manufacturing processes unviable.
Business groups are also mobilizing. The Business Council of Canada has already initiated discussions with counterparts in the U.S. Chamber of Commerce to present a united front against broad tariff implementation. “This isn’t just a Canadian problem,” said Council President Goldy Hyder. “American consumers and businesses would bear significant costs from these measures as well.”
From my conversations with diplomatic sources, Canada is also discreetly exploring alliances with other affected trading partners, particularly Mexico, Japan, and European nations. The European Union has already signaled willingness to coordinate responses to unilateral trade actions.
As night fell over Ottawa, the emergency meeting continued past its scheduled conclusion. Provincial leaders emerged looking grim but resolute. One premier, requesting anonymity, summarized the sentiment: “We’ve weathered storms before, but this requires unprecedented coordination.”
For ordinary Canadians, the potential impacts range from higher consumer prices to job insecurity in export-dependent regions. The Conference Board of Canada estimates consumer prices could rise by 2-3% across the board if full tariffs are implemented.
“The next six weeks before inauguration will be crucial,” noted Gordon Ritchie, who served as Canada’s ambassador for trade negotiations during the original free trade negotiations. “Canada needs to make its case through every available channel – business leaders, congressional allies, state governors, and strategic communications.”
As this high-stakes economic diplomacy unfolds, one thing is clear: Canada’s relationship with its largest trading partner is entering another period of profound uncertainty, with implications that will reach from corporate boardrooms to kitchen tables nationwide.
