The items under consideration include ceramics, steel and furniture, alcoholic beverages, orange juice and pet food. Canada is also contemplating taxing US energy exports as a “last resort”, it added.

Canada’s foreign minister Melanie Joly said, “I think we have to be ready”. However, sources told the channel that a final decision on retaliatory tariffs has not been taken.

Also read | Joe Biden’s heartfelt note for ‘my friend’ Justin Trudeau amid threats from Donald Trump

Joly said it is important for Trump to understand the potential consequences of his threats and realise that Canada has its own “leverage” to resort to.

Joly opts out of party leadership race

Joly on Friday opted out of the race to lead her Liberal party after prime minister Justin Trudeau’s resignation on Monday as its leader. Joly stressed that she needs to dedicate “every minute” of her time to defend the interests of Canadians in light of the economic threats from Trump.

“While I know I am ready to become the first woman to lead the Liberal Party of Canada, I must also recognise that the current international situation, especially the unjustified threat of tariffs and other economic pressures from the President-elect of the United States, requires a firm and urgent response. This is happening now,” she said in a letter posted on X.

Also read | Trudeau rebuffs Trump’s assertion that Canada should become US’s 51st state

Canada is the largest trading partner of the US. Washington imported $419 billion worth of Canadian goods in 2023. Canada is also the largest source of foreign oil into the US.

According to statistics released by the Canadian government, the US is the only country with which it enjoyed a widening trade surplus in November 2024. “Exports to the United States rose 6.8% in November, while imports increased 4.1%. As a result, Canada’s trade surplus with the United States widened from $6.6 billion in October to $8.2 billion in November,” the report said.