The government is preparing for the possibility that the incoming U.S. administration will impose high tariffs on Canadian goods, setting the close allies up for a showdown.

Canada's outgoing Prime Minister Justin Trudeau said on Wednesday that “nothing is off the table” when it comes to responding to proposed tariffs by President-elect Donald Trump, but that no single region of the country should bear the full brunt of that response.

Canada has drawn up an initial list of C$150 billion ($105 billion) of US-manufactured items that it would hit with tariffs if President-elect Donald Trump decides to levy tariffs against Canadian goods,