Canada’s Finance Minister Chrystia Freeland has resigned from her post, citing disagreements with Prime Minister Justin Trudeau over how to respond to new President Donald Trump’s tariff threat.

She announced her resignation on Monday in a letter to Trudeau in which she said the two “disagree on the best path forward for Canada” and noted the “major challenge” posed by Trump’s policies of “aggressive economic nationalism.” “ represents. .

Freeland said the decision came after Trudeau told her last week that he no longer wanted her to be his government’s top economic adviser.

Her resignation came just hours before she was due to present an annual report on the government’s financial situation in parliament.

The two have also reportedly argued in recent days over a policy that would have given every eligible Canadian a check for 250 Canadian dollars (US$175; 139 pounds).

The BBC has contacted the Prime Minister’s Office and the Treasury Department for comment.

In her publicly available resignation letter, Freeland said Canada needs to keep its “fiscal powder dry” to deal with the threat of sweeping tariffs from U.S. President-elect Donald Trump.

She added that this means “steering clear of costly political games” that Canada cannot afford.

Trump has promised to see this through a 25% levy on imported Canadian goodswhich economists have warned would significantly damage Canada’s economy.

Freeland called the tariffs a “threat” that must be taken “extremely seriously.”

She added that this means “cracking down on ‘America First’ economic nationalism” and responding with unity to these tariff threats.

Freeland and Trudeau were reportedly at odds over a series of measures recently proposed by the prime minister to address the country’s cost of living crisis.

Among them is a check for $250 CAD that the government planned to send to every Canadian who earns less than $150,000 CAD per year. These checks were expected to cost the federal government a total of 4.68 billion Canadian dollars.

Another is a temporary tax break on essential items during the holidays, which is expected to cost $1.6 billion in tax revenue.

Freeland’s office was reportedly concerned about the price tag of these two measures, saying they were economically unwise at a time when the country’s deficit is growing.

The tax exemption has since been approved in the House of Commons, but the C$250 checks hit a hurdle when the New Democratic Party – a center-left party in Parliament – signaled it would not support the policy as long as it is not expanded.

A survey by The Angus Reid Institute showed that four out of five Canadians viewed the checks as a political move Designed to gain public goodwill while Trudeau’s popularity declines.

Freeland, who also holds the post of deputy prime minister, has long been one of Trudeau’s closest allies within his Liberal Party. Since 2020, she has held the key role of Canada’s Finance Minister, helping to guide the country through the pandemic and its consequences.

She replaced former finance minister Bill Morneau, who also resigned after a dispute with Trudeau over the government’s spending policies and conflicts of interest with a youth charity.

Other members of the Liberal Party’s cabinet have since responded to her resignation.

“These are difficult and deeply personal decisions and obviously she made that decision and I respect her for it,” said Patty Hajdu, Canada’s minister of Indigenous relations.

Transport Minister Anita Anand described Freeland as a “good friend” and added: “This news has hit me really hard and I will reserve further comment until I have time to process it.”

It is unclear whether the fall economic statement will be delivered as planned on Monday given Freeland’s resignation. A government official told Reuters that the Treasury Department was determining next steps.

Canadian public broadcaster CBC reported, citing a senior federal government source, that Freeland’s resignation was not expected today.

Freeland said she intends to remain in Parliament as a Liberal MP and run again in Canada’s upcoming election, which must take place no later than October.

Her resignation comes after another Cabinet member, Housing Minister Sean Fraser, announced he would not seek re-election, saying he wanted to spend more time with his family.