(Bloomberg) — Canada has prepared a sweeping package of counter-tariffs against US-made products, its foreign minister said, after President Donald Trump confirmed his administration will go ahead with duties against Canada and Mexico on Tuesday. 

“No room left for Mexico or for Canada,” Trump told reporters Monday when asked if those two countries could reach a deal to delay tariffs. “They’re all set. They go into effect tomorrow.”

Minutes later, Canadian Foreign Minister Melanie Joly said the government is ready to go ahead with the retaliatory duties announced in early February by Prime Minister Justin Trudeau. 

Those included an initial set of 25% tariffs on about C$30 billion ($20.6 billion) worth of goods from US exporters — including orange juice, peanut butter, wine and coffee — and a second tranche on C$125 billion of products, including cars, trucks, steel and aluminum, which would come into effect in a few weeks. 

“We know that this is an existential threat to us, and there are thousands of jobs in Canada at stake,” Joly said. “Should the US decide to launch their trade war, we will be ready. We are not looking for this. We’re not seeking this.”

The Canadian dollar and stocks tumbled, with the benchmark S&P/TSX Composite Index falling 1.5%, the most since Dec. 18. Traders in overnight swaps increased bets the Bank of Canada would cut interest rates by 25 basis points at its March 12 meeting, rising to nearly 80% from about a coin flip before the president’s remarks.

Trump’s executive order, signed Feb. 1, calls for 25% tariffs against most of what the US imports from Canada and Mexico and 10% on Canadian energy products such as crude oil. 

The Bank of Canada has warned that a prolonged tariff war has the potential to chop Canadian output by nearly 3% over two years and “wipe out growth” during that period. Demand for Canadian goods in the US would suffer, exporters would cut production and jobs, prices for products imported from the US would rise, and consumers and businesses would spend less.

Trudeau, who’s set to leave office in a matter of days, is returning Monday from a trip to London, where he met with UK Prime Minister Keir Starmer and other leaders. 

“Businesses on both sides of the border have already been damaged by the uncertainty coming from President Trump’s drip-drip-drip of tariff threats,” Matthew Holmes, chief of public policy at the Canadian Chamber of Commerce, said in a statement Monday.

“We will have a long road back to Canada and the US being trusted economic partners again. Businesses can’t just switch their whole model to avoid tariffs and then go back again, depending on what politicians decide on any given day,” Holmes said.

Trump’s executive order alleged the US’s northern neighbor was allowing too much fentanyl to flow over the border. Canadian officials say that’s simply not true — pointing to US government data that shows far less than 1% of seizures of the illicit opioid happened at or near the northern crossing. 

Still, Canada announced a C$1.3 billion plan to increase border security by adding more aerial surveillance through helicopters and drones and included a pitch for a new North American joint “strike force” to tackle the fentanyl trade. Trudeau has also appointed a fentanyl czar and beefed up personnel at the border, and promised measures to crack down on organized crime. 

Canadian cabinet ministers, provincial premiers and other policymakers have made repeated trips to Washington in recent weeks to talk about the border plan and to urge US lawmakers and members of Trump’s team not to impose the tariffs. 

Joly said her government has had “constructive conversations” with the Trump administration about Canada’s border plan. But “there’s a level of unpredictability and chaos that comes out of the Oval Office and we will be dealing with it,” she said. 

Immigration Minister Marc Miller said shortly before Trump’s comments on Monday that there’s “no question” tariffs will be painful for the Canadian economy. 

“We will have to bring the fight and it will hurt Americans as well. It’s important to reiterate that 35 of those states, their primary trading partner is Canada, so it will hurt them. And we hope the logic will prevail.”

—With assistance from Randy Thanthong-Knight, Melissa Shin and Erik Hertzberg.

(Updates with market reaction and additional information, beginning in the fifth paragraph.)