Canadian Finance Minister resigns over Trump’s tariff dispute with Trudeau.

Canadian Finance Minister Chrystia Freeland resigned from her post, citing disagreements with Prime Minister Justin Trudeau on how to respond to incoming President Donald Trump’s tariff threat.

Announcing his resignation in a letter to Trudeau on Monday, Trump pointed out that the two “disagreed on what is the best path for Canada” and that Trump’s policy of “aggressive economic nationalism” poses a “serious challenge.”

Freeland said the decision was made after Trudeau informed her last week that he no longer wanted her to serve as his government’s chief economic adviser.

His resignation came just hours before he was due to present the annual fiscal government update in parliament.

The two have also reportedly been at odds in recent days over a policy that would see every eligible Canadian receive a check for C$250 ($175; £139).

The BBC has contacted the prime minister’s office and the finance ministry for comment.

In her resignation letter, which she shared with the public, Freeland said that Canada should “keep its financial resources ready” to cope with the comprehensive customs duties imposed by US President-elect Donald Trump.

This, he added, means “avoiding costly political games” that Canada cannot afford.

Trump has promised to impose a 25% tax on goods imported from Canada; Economists warned that this tax would seriously damage the Canadian economy.

Referring to the tariffs, Freeland said they were “a threat that must be taken extremely seriously.”

That means countering “America First” economic nationalism and working together against these tariff threats, he added.

Freeland and Trudeau reportedly disagreed over a set of policies the prime minister recently proposed to address the country’s cost-of-living crisis.

Among them is a check for C$250 that the government wants to send to every Canadian with an annual income of less than C$150,000. These checks were expected to cost the federal government a total of C$4.68 billion.

Another is the temporary tax reduction applied to basic necessities during the holiday period, which is expected to lead to a tax loss of 1.6 billion Canadian dollars.

Freeland’s office is reportedly concerned about the cost of these two policies, saying they are economically unwise at a time when the nation’s deficit is rising.

The tax exemption was approved in the House of Commons, but the checks for 250 Canadian dollars were blocked when the New Democratic Party, the center-left party in the parliament, stated that it would not support the policy unless the application was expanded.

An Angus Reid Institute poll found that four-fifths of Canadians view the checks as a political move designed to gain public sympathy at a time when Trudeau’s popularity is waning.

Following Freeland’s resignation, opposition Conservative Party of Canada leader Pierre Poilievre called for a federal election as soon as possible.

“Everything is getting out of control. We can’t go on like this,” he said, adding that his resignation came at “the worst time.”

Freeland, who also holds the position of deputy prime minister, has long been one of Trudeau’s closest allies in the Liberal party. He has held a key role as Canada’s finance minister since 2020, helping lead the country through the pandemic and beyond.

He replaces former Finance Minister Bill Morneau, who resigned following a disagreement with Trudeau over government spending policies and allegations of conflict of interest regarding his youth charity.

Other members of the Liberal Party’s cabinet also reacted to the resignation.

“These are difficult and deeply personal decisions, and frankly he made that decision, and I respect that,” said Patty Hajdu, Canada’s Minister of Indigenous Affairs.

Transport Minister Anita Anand described Freeland as a “good friend” and said, “I am deeply affected by this news and will not comment further until I have had time to digest the matter.”

In a statement, the Business Council of Canada called Freeland’s resignation “deeply troubling” and said the concerns she raised raise the question “whose interests the federal government is looking after?”

Canada’s Ministry of Finance said that despite Freeland’s resignation, the fall economic statement will be released on Monday as planned.

Canada’s public broadcaster CBC, citing a senior federal government source, stated that Freeland’s resignation decision is not expected to be announced today.

Freeland has said she plans to remain in parliament as a Liberal Party MP and will run again in Canada’s upcoming elections, which should be held in October or earlier.

His resignation came after another cabinet member, Housing Minister Sean Fraser, announced he would not seek re-election and wanted to spend more time with his family.