Trudeau, facing disagreements over US tariff response, to convene cabinet

By David Ljunggren and Ryan Patrick Jones

(Reuters) -Prime Minister Justin Trudeau, facing disagreements over how Canada should respond to threatened U.S. tariffs, will hold a cabinet retreat next week focused on defending Canadian interests, his office said on Tuesday.

U.S. President-elect Donald Trump has promised to impose a 25% tariff on imports from Canada, which economists say would trigger a deep recession. Canada sends 75% of all exported goods and services to the United States.

"Cabinet will protect and defend Canadian interests, strengthen Canada's relationship with the U.S., and make unequivocally clear the mutually beneficial trade and security relationship the two countries share," Trudeau's office said.

Trudeau, who will step down as prime minister in early March, is promising countermeasures if Trump carries out his threat and wants a united response from the federal government and 10 provinces.

But splits are emerging and some provinces are unhappy with what they see as a lack of leadership from Ottawa.

"The federal government ... need to get their act together," Ontario Premier Doug Ford said. Ontario, the most populous province and Canada's industrial heartland, could lose up to 500,000 jobs if tariffs are imposed, he said.

The premiers are due to meet Trudeau in Ottawa on Wednesday to discuss the potential tariff response.

"We can't have a divided Canada. We have to make sure we all stick together," Ford told reporters.

On Sunday, Foreign Minister Melanie Joly said Canada was not ruling out curbing energy exports to the U.S.

But Danielle Smith, premier of oil-producing Alberta, predicted there would be a national unity crisis if Ottawa tried to shut off crude exports.

"We won't stand for that," Smith said on Monday after meeting Trump in Florida. "I can’t predict what Albertans would do."

The Jan. 20-21 cabinet meeting will coincide with Monday's inauguration of Trump, who is unhappy at what he says is lax security on the joint border. He has also mused about making Canada the 51st state.

Canada responded by unveiling a C$1.3-billion ($909 million) border-security plan, with an emphasis on surveillance, intelligence and technology.

(Reporting by Ryan Patrick Jones and David Ljunggren; Editing by Doina Chiacu, Paul Simao and Rod Nickel)

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