has rejected Moscow's claims.

Mr Karaguesian said the promised US tariffs on Canadian goods could plunge the country into a recession. If Canada responded with dollar-for-dollar tariffs, it could lead to inflation.This would result in "stagflation," he said, referring to a combination of high unemployment and rising prices.

Mr Clark said that whatever decision Canada took, politics would likely be top of mind. Polls suggest a majority of Canadians support retaliation, and that many Canadian business leaders want targeted, dollar-for-dollar tariffs.Canadian politicians might be pushed to respond more forcefully if it means a boost in approval, Mr Clark said. "We're talking about political decisions, which are not always rational."One of the most valuable assets in Canada's arsenal is energy.

North-eastern US states like Vermont, New York and Maine significantly rely on electricity sold to them by neighbouring Canadian provinces. British Columbia and Manitoba also supply energy to western and Midwestern regions of the US.About 30 states receive some of their electricity from Canada, according to Canadian government data.

Canada is also the top supplier of crude oil to the US, making up 60% of total oil imports, according to the US Energy Information Administration.

Doug Ford, Ontario's premier, has suggested that Canada cut off Americans' supply to pinch Americans at the petrol pump.“We will write to people immediately to explain the plans are quite likely to change so we don't know whether their properties are definitely going to be demolished or remodelled at all.

“It will take us some time to confirm that and I am afraid it is just inevitable, there is no point giving people a message that we are not 100% sure of ourselves.“At the same time, we really recognise that we need to try to get some certainty for residents as quickly as possible."

The deputy prime minister has told the BBC she wants the government's Right to Buy housing scheme to continue but that it needed to be "fairer" to the taxpayer.Angela Rayner insisted she was committed to keeping it, as it was important that social tenants were able to buy the homes they had lived in for a long time.