OTTAWA (Reuters) - Canada, citing fears that recent trade turbulence could cut the value of domestic companies, on Wednesday vowed to make it harder for foreign firms to launch "predatory" takeover bids.

Innovation Minister Francois-Philippe Champagne made the announcement a day after U.S. President Donald Trump launched a trade war against Canada and Mexico.

Under the Investment Canada Act, Ottawa can approve or reject mergers and acquisitions based on their net benefit to the country. Champagne said from now on, investments would also be studied to see if they might undermine Canada’s security at a time when the economy was facing unprecedented challenges.

"As a result of a rapidly shifting trade environment, some Canadian businesses could see their valuations decline, making them susceptible to opportunistic or predatory investment behavior by non-Canadians," Champagne said in a statement.

"When these businesses are important to Canada’s economic resiliency ... it would run counter to Canada’s interests to allow them to fall victim to this type of behavior."

He did not give details. Last July, the government put the mining industry on notice that any major deals targeting the country’s producers of critical minerals would only be approved under "the most exceptional circumstances".

In March 2024, Ottawa introduced tougher national security reviews of proposed foreign investments in sensitive sectors to enable it to quickly spot potentially problematic deals.