Canada's government faces uncertainty as Finance Minister Chrystia Freeland resigns, leaving the country vulnerable to looming U.S. tariffs under President-elect Donald Trump.
Canada’s government is facing political turmoil after Finance Minister Chrystia Freeland abruptly resigned on Monday, leaving Prime Minister Justin Trudeau’s administration adrift just weeks before the inauguration of a U.S. administration that has threatened severe tariffs on Canadian exports.
Freeland stepped down after Trudeau offered her a lesser role in cabinet, citing disagreements over the prime minister's push for increased spending. She warned that excessive spending could weaken Canada’s ability to withstand the economic fallout from potential tariffs imposed by U.S. President-elect Donald Trump.
As the head of a special cabinet committee on Canada-U.S. relations, Freeland had been instrumental in coordinating with Canada’s 10 provinces to prepare a unified response to Trump’s trade policies.
Her departure came as a shock, particularly to Alberta Premier Danielle Smith, who criticized the government for leaving provincial leaders blindsided. Smith revealed that premiers learned of Freeland’s resignation halfway through a critical meeting about Canada-U.S. relations.
The resignation has further deepened internal divisions within Trudeau’s ruling Liberal Party. Disgruntled legislators, some of whom have been urging Trudeau to resign for months, gathered in Ottawa to express their frustration over the party’s declining popularity.
With national elections due no later than October 2025, the Liberals are trailing in the polls, putting Trudeau under increasing pressure to step aside.
Freeland’s departure comes at a precarious time for Canada’s economy. During Trump’s first presidency in 2017, he threatened to dismantle the North American Free Trade Agreement (NAFTA), a move that could have devastated Canada’s U.S.-dependent economy.
Freeland, then foreign minister, played a pivotal role in renegotiating the deal, helping to secure the United States-Mexico-Canada Agreement (USMCA).
With Trump poised to return to power and hinting at renewed tariffs, Canada now finds itself without one of its most experienced negotiators at a crucial moment. Trudeau's government faces mounting pressure to stabilize the leadership vacuum and reassure Canadians that the country is prepared to navigate the economic and political challenges ahead.
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