Canada is drawing up plans for extensive tariffs against US products if Donald Trump follows through on his threat to put 25% levies on Canadian goods, according to people familiar with the matter.

Donald Trump said this week he will use economic coercion to pressure Canada to become the nation’s 51st state.

Canada imported $320 billion in U.S. goods in the first 11 months of 2024, nearly equaling the European Union’s $341 billion. A U.S. 25% tariff could reduce Canada’s GDP by up to 3.8%, with retaliatory tariffs amplifying the impact to as much as 5.