A full-blown trade war between the U.S. and Canada could lead to a recession in both countries, economist says.

The leaders of Mexico and Canada responded quickly, and in different ways. Justin Trudeau, Canada’s prime minister, jumped on the phone to Mr Trump to chat about the “intense and effective connections” between their countries. His deputy, Chrystia Freeland, released a statement about the importance of border security.

If Canada seeks to retaliate over U.S. president-elect Donald Trump's tariff threat, the government should hit the U.S. where it hurt would both economically and politically, some trade experts suggest.