Canada’s deputy PM resigns from cabinet as tensions with Trudeau rise over Trump tariffs

Canada’s deputy prime minister and minister of finance has resigned amid growing tensions with the prime minister, Justin Trudeau, over the looming threat posed by Donald Trump’s “America First” economic nationalism.

Chrystia Freeland stood down on Monday, just hours before she was due to release the country’s first economic plan ahead of the change of administration in Washington.

The move stunned the country, left Trudeau without a key cabinet ally – and raised fresh doubts over his political survival. Political observers were closely reading the resignation letter by Freeland, who has previously served as foreign affairs minister and was once a journalist – and is seen as a ready replacement for Trudeau.

Relations between Canada and the US have been upended by Trump’s pledge to slap a 25% levy on all Canadian goods and services.

“For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada,” said Freeland in a letter to the prime minister.

“Our country today faces a grave challenge. The incoming administration in the United States is pursuing a policy of aggressive economic nationalism, including a threat of 25% tariffs,” she states.

“We need to take that threat extremely seriously,” she continues.

Freeland writes that Canada needs to keep its “fiscal powder dry today” so that they have the reserves for a “coming tariff war”.

She warns Trudeau that “costly political gimmicks” need to be done away with as they can make Canadians doubt whether the government understands the “gravity of the moment”.

“That means pushing back against ‘America First’ economic nationalism with a determined effort to fight for capital and investment and the jobs they bring. That means working in good faith and humility with the Premiers of the provinces and territories of our great and diverse country, and building a true Team Canada response.”

Earlier this month, Trudeau met with the president-elect and posted a smiling photo of the two of them at dinner in Florida. He told the Canadian Broadcasting Corporation that he promised Trump Canada would shore up border security in surveillance.