Trudeau’s resignation comes at tough time for Canada-U.S. tariff talks: experts

WASHINGTON — The difficult diplomacy Canada is attempting with the incoming Trump administration took on new pressure Monday as Prime Minister Justin Trudeau announced he will resign his post as soon as a new Liberal leader is chosen.

Trudeau’s decision, while not unexpected after weeks of growing pressure from his own caucus, still brings instability to Ottawa just as Canada is trying to tamp down Donald Trump’s threat of devastating tariffs.

“To be blunt, I don’t think a leadership change could come at a worse moment in our bilateral relationship,” said Fen Osler Hampson, a professor of international affairs at Carleton University in Ottawa and co-chair of the Expert Group on Canada-U.S. Relations.

“We are staring down the barrel of a gun with Donald Trump’s threats to impose 25 per cent tariffs on Canada and Mexico. The key question obviously is: Who speaks for Canada?”

Trudeau attended a meeting Monday of the cabinet committee he re-established in November immediately after Trump’s re-election. Finance Minister Dominic LeBlanc, who chairs that committee, has travelled to Florida twice in recent months to meet with Trump and his team.

The date hasn’t been set for a leadership race but Trudeau also prorogued Parliament until March 24, and many expect a new Liberal leader to be in place before then.

Trudeau said he would step aside because the internal conflict within his party over his leadership had become a distraction and Canadians deserve a clear choice in the next election.

President-elect Trump, however, responded to Trudeau’s announcement saying the prime minister is resigning because he knows the United States will not put up with trade deficits with Canada. Trump also said many Canadians would love to be the 51st state.

“The United States can no longer suffer the massive trade deficits and subsidies that Canada needs to stay afloat,” Trump posted on Truth Social.

“Justin Trudeau knew this, and resigned.”

Trump reiterated his rhetoric about Canada joining the U.S., claiming there’d be no tariffs, lower taxes and more security. He posted, “Together, what a great Nation it would be!!!”

Trump’s response is in keeping with his efforts to troll Trudeau and Canada since winning the election in November: he has repeatedly referred to Trudeau as “governor” of the 51st state.

“Trump will take credit for anything and will spin anything into an opportunity to make himself look better,” said Laura Dawson, an expert on Canada-U.S. relations and the executive director of the Future Borders Coalition.

Trump has threatened to implement damaging tariffs against America’s closest neighbours on Day 1 of his administration unless the two countries stop the flow of migrants and illegal drugs into the U.S.

Canada subsequently announced a series of measures to beef up the border with a $1.3-billion package in response to the threat. But Trump has not indicated whether he will put a pause on the tariffs.

The Republican has also indicated his intention to make changes to the Canada-U.S.-Mexico Agreement. It’s likely that work will begin sometime this year, ahead of the official trade pact review in 2026.

Trudeau said the Liberal government will remain focused on fighting for Canadian interests during a leadership race that could include cabinet ministers who have been working closely on the Canada-U.S. file. LeBlanc and Foreign Affairs Minister Mélanie Joly are both considered possibilities to run in the race.

“I can assure you that the tools and the need to stand up for Canadians, to protect Canadians in their interests and continue to fight for the economy, is something everyone in this government will be singularly focused on,” Trudeau said outside Rideau Cottage in Ottawa.

Dawson was less optimistic. Ottawa was already lagging in its response to concerns over the relationship with Canada’s largest trading partner, she said. More than 77 per cent of Canadian exports go to the U.S.

“Now having Ottawa going from moving very slow to what looks like a full stall until March (2025), we really can’t afford to have this gap in leadership that lasts for so long,” Dawson said.

Observers also say Trump only negotiates with people who have power and Trudeau is essentially a lame-duck leader. Hampson said Trump will not “waste his time with Ottawa.”

That means, Hampson said, provincial premiers are being put in a position where they will have to carry more of the bilateral burden. However, he added, a unified approach is critical.

Ontario Premier Doug Ford and Alberta Premier Danielle Smith have already made the rounds on American news stations, facing some criticism for going against the messages Ottawa would have preferred to send.

On Monday, Smith called on federal parties to force an election at the first available opportunity. She posted on social media that Canadians deserve a prime minister and federal government with a clear mandate “to negotiate with the incoming U.S. president and his administration on one of the most important international negotiations we have ever faced as a country.”

Ford said he still wants to sit down with Trudeau and the rest of the country’s premiers to strategize on the tariff threat, describing the moment as an “all hands on deck” approach.

“We need the prime minister to continue doing his job — prorogation doesn’t mean vacation,” Ford said Monday.

This report by The Canadian Press was first published Jan. 6, 2025.

— With files from Liam Casey in Toronto

Kelly Geraldine Malone, The Canadian Press