Justin Trudeau said on Sunday that the country is poised to impose counter-tariffs should Donald Trump initiate a trade conflict.

What Happened: Trudeau stressed that while Canada does not desire a trade war, it is prepared to retaliate if the U.S. imposes tariffs on Canadian goods. The outgoing Canadian prime minister made this announcement during an appearance on MSNBC's Inside With Jen Psaki.

The U.S. Commerce Department data indicates that Canada is the largest purchaser of U.S. products, with purchases amounting to approximately $320 billion last year.

In 2018, when the Trump administration levied tariffs on steel and aluminum, Canada responded by imposing tariffs on U.S. goods such as household appliances and whiskey. Bloomberg reported earlier that a draft retaliation plan could target nearly all U.S. imports to Canada.

"As we did last time, we are ready to respond with tariffs as necessary," he said.

Trudeau also mentioned Canada’s increased spending on border security to address U.S. concerns about illegal migration and fentanyl. He dismissed Trump’s comments about annexing Canada as a distraction from more pressing issues.

Meanwhile, Alberta Premier Danielle Smith met with Trump to discuss the U.S.-Canada energy relationship, as over half of U.S. crude imports come from Canada. Foreign Affairs Minister Mélanie Joly stated that all options regarding energy supplies are being considered.

Why It Matters: The backdrop to this situation involves a series of events that have heightened tensions between the U.S. and Canada. In early January, Trump suggested that Canada could become the 51st U.S. state, criticizing trade imbalances and subsidies.

In response, a Canadian official humorously suggested buying two American states, highlighting the strained relations. Furthermore, Trudeau had previously warned Trump about the adverse effects of his proposed 25% tariff plan during a high-stakes dinner in November.

Adding to the complexity, Trudeau announced his resignation amid internal conflict and tension over Trump tariffs.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Image via Flickr/ World Economic Forum