When President-elect Donald Trump recently floated the idea of annexing Canada, a key reason he gave was a claim that the United States was “losing $200 billion a year” to its northern neighbor.

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 ambassador to Washington says Canada is prepared to buy more from the United States including its next fleet of submarines to appease President-elect Donald Trump's concerns about the U.S.