Canada vows 'Trump tax' on US in response to tariffs

Americans will be hit by a "Trump tariffs tax" if the US president-elect increases customs duties on Canadian products, the Canadian foreign minister said Friday, pledging a hard-hitting response in any trade war.

Donald Trump, who returns to the White House next week, has said he plans to slap 25 per cent tariffs on Canadian imports as part of his economic and foreign policy plans that also target Mexico, China and other trade partners.

"This would be the biggest trade war between Canada and the US in decades," Foreign Minister Melanie Joly said. "The Americans would be starting a trade war against us.

"We are ready to put maximum pressure," she said at a press conference in Washington, adding that Canada has a series of measures prepared if Trump carries out his threat, which would have a major impact on Canadian consumers and jobs.

A government source told AFP that Ottawa is considering higher duties on goods from the United States including steel products, ceramics like toilets and sinks, glassware and orange juice -- in a first phase of tariffs that could be extended.

"We will be strong and unequivocal in our defense of Canada and Canadians," said outgoing Prime Minister Justin Trudeau.

"The proposed tariffs would put American jobs at risk, raise prices for American consumers, put our collective security at risk and raise costs all across the continent."

One scenario from Scotiabank suggests that a trade war could cause Canadian GDP to fall by more than five per cent, increase unemployment significantly and fuel inflation.