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.

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

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.