Tobi Lutke, co-founder of Shopify, a Canadian tech giant, voiced his frustration with Prime Minister Justin Trudeau’s decision to retaliate against US President Donald Trump’s tariffs.
Lutke’s comments followed Trudeau’s announcement to impose $107 billion in tariffs on American goods in response to Trump’s new trade policies.
Trudeau’s Retaliation Strategy
Trudeau’s retaliatory tariffs, set to take effect on Tuesday, coincide with Trump’s own tariffs, which include a 25% levy on goods from Canada and Mexico, as well as a 10% tariff on Chinese imports.
These tariffs affect over $2.1 trillion in annual trade between the countries, raising tensions between the US and Canada.
Lutke, a key figure in Canada’s tech industry, shared his disappointment publicly.
“I’m disappointed that [the] Trump admin placed the 25 percent tariffs,” he posted.
“I’m disappointed that this is our government’s response.”
A Call for Cooperation
Lutke believes Canada thrives when it collaborates with the United States.
He argued that Trump’s demands, though unpopular, weren’t unreasonable.
They centered around securing borders and tackling fentanyl trafficking.
“These are things that every Canadian wants its government to do too,” Lutke pointed out.
He expressed concern that retaliatory tariffs would harm small businesses and Canadians’ livelihoods.
“Leadership is about doing what’s right, not what is popular,” he said, warning that responding to tariffs with more tariffs would only make things worse.
“America will shrug it off. Canada will decline,” he predicted, calling a trade war the wrong approach.
Shopify’s Rise and Lutke’s Wealth
Lutke’s success with Shopify, which he founded in 2006, has turned the company into Canada’s largest tech enterprise, valued at $150 billion.
As the second-largest company in Canada, Shopify only trails behind the Royal Bank of Canada.
Lutke himself is worth around $10 billion, making him one of the wealthiest people in the country.
Trump’s Stand on Tariffs
Trump’s tariff proposal includes a 10% tax on Canadian energy imports, particularly crude oil, which the US heavily depends on.
He believes these tariffs will help boost American manufacturing and reduce reliance on foreign oil.
In response, Trudeau announced that Canada would target American goods such as beer, wine, bourbon, fruits, and household items.
Although Trudeau acknowledged the challenges Canada faces with these tariffs, he also suggested that the United States would not come out unscathed.
“Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants,” he warned.
“They will raise costs for you, including food at the grocery store and gas at the pump.”
Trump’s Criticism of Canada
Trump has criticized the US’s financial relationship with Canada, claiming that Americans subsidize the Canadian economy to the tune of billions.
He suggested that Canada might benefit from becoming the 51st US state, benefiting from lower taxes and better military protection, as well as the elimination of tariffs.
Future Talks and Potential Escalation
Trump also mentioned plans to speak with leaders from Canada and Mexico, emphasizing that any trade resolution would require substantial changes, including better trade balances and addressing illegal immigration.
“They have to balance out their trade,” Trump stated, adding that Canada has not done enough to curb fentanyl trafficking.
Additionally, Trump hinted that he may impose tariffs on the European Union and the UK if they fail to purchase more American oil and gas to counterbalance the US trade deficit.
Prime Minister Keir Starmer of the UK has shown interest in securing a trade deal with the US, with reports suggesting that talks could take place in Washington soon.
The global trade situation is poised for further developments in the wake of these ongoing tensions.
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