Canada's Finance Minister Chrystia Freeland has resigned in a blow to Prime Minister Justin Trudeau, who faces falling approval ratings and opposition from within his own party, as well as the prospect of a trade war with the United States.

Freeland revealed in her resignation letter, posted Monday on X, that Trudeau informed her last week that he no longer wanted her to serve in the role and would instead offer her another cabinet position.

"Upon reflection, I have come to the conclusion that the only honest and viable path for me is to resign from the cabinet," Freeland wrote.

“For the past several weeks, you and I have found ourselves at odds over the best path forward for Canada,” she continued.

Trudeau did not immediately respond to the resignation, which comes days after he met with Canada's provincial leaders to outline his plans to respond to threats of a trade war with U.S. President-elect Donald Trump, who on Jan. 20 take office.

Trump has vowed to impose 25 percent tariffs on goods from Canada and Mexico if the neighboring countries do not stop what he called an "invasion" of undocumented migrants and drugs.

The Trudeau government was allegedly develop plans to invest in increased border security and monitoring in response, but has faced increasing pressure to take a harder line against Trump.

The government was to present further details of the border plan to the Parliament of Canada on Monday, in an economic update to be delivered by Freeland.

A former journalist, Freeland has also served as deputy prime minister since 2019. In her resignation letter, she said she did not agree with how the government approached policy towards its southern neighbour.

"Our country today faces a serious challenge," she said, describing Trump's threat as "aggressive economic nationalism."

"We have to take that threat extremely seriously," she continued.

“That means we're keeping our fiscal powder dry today, so we have the reserves we might need for an upcoming tariff war. That means avoiding costly political stunts, which we cannot afford and which make Canadians doubt that we recognize the gravity of the moment.”

In another blow to Trudeau, Housing Minister Sean Fraser also announced Monday that he will not seek re-election.

Impending elections

The updates come as Trudeau's Liberal Party prepares for elections in October next year. Trudeau has said he plans to remain at the helm of the party.

Because Liberals do not have an outright majority, it would trigger a new election at any time if the allied New Democratic Party withdrew its support.

Meanwhile, Trump's victory raised concerns that Canada could be subject to global anti-incumbency trends that the Conservative Party, led by populist Pierre Poilievretakes power for the first time since 2015.

After nearly a decade in power, Trudeau saw his approval rating drop to just 33 percent in September.

He has continued to face criticism over high consumer and housing costs, the legacy of his administration's response to the COVID-19 pandemic, and most recently, his handling of Trump.

The US president-elect and his allies have further helped color public perception with their frequent mocking of Trudeau. Most recently, Trump referred to the prime minister as the "governor" of a "great state".

It came shortly after Trudeau, who visited Trump's Mar-a-Lago estate in Florida, US last month in an effort to mend ties, said Canada would "respond to unfair tariffs in a number of ways ".

Trudeau's government previously imposed retaliatory tariffs after Trump imposed tariffs on Canadian steel and aluminum during his first term.

The tariffs were eventually lifted by both countries.