Trudeau dismisses 'very dumb' tariffs, says Trump wants to ruin Canadian economy

By David Ljunggren and Promit Mukherjee

OTTAWA (Reuters) -Prime Minister Justin Trudeau told U.S. President Donald Trump on Tuesday that his tariffs on Canadian imports were "a very dumb thing to do" and said Ottawa was striking back immediately at its closest ally.

Trudeau, who is stepping down at the end of the week, also accused Trump of wanting to ruin the Canadian economy.

Trudeau, speaking hours after Trump launched a trade war against Mexico and Canada, announced immediate 25% tariffs on C$30 billion worth of U.S. imports. If need be, Canada will target another C$125 billion worth in 21 days' time, he said.

"There is absolutely no justification or need whatsoever for these tariffs," Trudeau told reporters, adding that Canada would challenge the U.S. measures at the World Trade Organization and through a U.S.-Mexico-Canada trade agreement already in place.

"Canadians are reasonable and we are polite, but we will not back down from a fight, not when our country and the well-being of everyone in it is at stake," he said.

Trump responded by saying the Canadians retaliatory tariffs would be met with immediate reciprocal tariffs of the same size.

Trump has accused Canada of failing to do enough to stem the flow of the deadly fentanyl opioid and its precursor chemicals into the U.S., an argument Trudeau called "completely bogus, completely unjustified, completely false."

Trudeau's relations with Trump, which have never been warm, deteriorated in recent months after the president repeatedly talked of Canada becoming the 51st U.S. state and mockingly referred to Trudeau as its "governor" rather than prime minister.

Trump says he is unhappy with the trilateral U.S.-Mexico-Canada trade deal that he signed in his first term. Trudeau played down the idea of opening talks ahead of a review scheduled for 2026.

"Given that he is choosing to want to ruin the Canadian economy, I don't know whether to bring forward negotiations, given the situation of such bad faith that we're in," said Trudeau, who warned Canadians that tough times were coming.

Economists say Canada, which sends 75% of all exports to the United States, will plunge into a recession unless the tariffs are lifted quickly.

Trudeau said Americans would suffer as well, given how tightly the two economies are connected, and he referred to a Wall Street Journal editorial in late January that said Trump would be launching "the dumbest trade war in history" if he went ahead with tariffs.

"It's not in my habit to agree with the Wall Street Journal, but Donald, they point out that even though you're a very smart guy, this is a very dumb thing to do," said Trudeau, who will step down as prime minister after the ruling Liberal Party chooses a new leader on Sunday.

The Canadian government will help by expanding employment insurance benefits and giving direct supports to businesses, he said.

ALCOHOL OFF SHELVES

Trump's unprecedented actions threaten to severely damage relations between the three trading partners.

Trudeau said Canada would also look at non-tariff measures if need be but did not answer directly when asked whether Ottawa might curb exports of crude oil or potash.

"Our focus has to be on getting these tariffs lifted as quickly as possible," he said.

The U.S.-Mexico-Canada Agreement, which was forged under Trump during his first term in the White House and which updated the North American Free Trade Agreement, allows for duty-free trade between the three countries. The pact carries provisions for rules of origin for autos and auto parts and steel-intensive products, among others and also allows for exceptions related to security.

Canada's two most populous provinces, Quebec and Ontario, are taking U.S. alcohol off the shelves of provincially-run liquor stores.

Ontario Premier Doug Ford said if U.S. tariffs persisted, the province would also impose a 25% surcharge on electricity exports to New York, Michigan and Minnesota.

"We need to make sure America feels the pain," he said.

Tensions are so high that Canadian sports fans have begun booing U.S. teams at ice hockey games.

"We're going to choose to try to buy Canadian products and forgo bourbon and other classic American products. And yeah, we're probably going to keep booing the American anthem," Trudeau said.

"But let me tell Americans, we're not booing you, we're not booing your teams, we're not booing your players. We're booing a policy that is designed to hurt us. And we're insulted and we're angry ... we're going to fight and we're going to win."

(Reporting by David Ljunggren and Promit Mukherjee; Editing by Andrea Ricci, Nia Williams, Leslie Adler and Deepa Babington)