Justin Trudeau steps down as Liberal Party leader in Canada.

• Trudeau has been battling waning popularity and the specter of U.S. trade tariffs.
• The recent political crisis in Canada was caused by the sudden departure of former Trudeau ally and Deputy Finance Minister Chrystia Freeland, who resigned in December due to disagreements over Ottawa's approach to potential U.S. trade protectionism.
• The possibility of both 25% tariffs on Canadian goods and annexation has been teased by President-elect Donald Trump.

On Monday, Justin Trudeau, Canada's leader of the Liberal Party, announced that he would step down from his position but will remain as prime minister until a new leader is chosen.

"I plan to step down as party leader and prime minister after the party selects its next leader through a thorough process," he stated during a Monday press conference. "I cannot be the one to uphold the liberal ideals in the upcoming election."

He added that the Canadian parliament will be prorogued until March.

On Wednesday, it was reported that the domestic press expected him to announce his resignation before a key national caucus meeting. As a result, Canadian stocks were slightly higher. The S&P TSX index rose by 0.1%, and the Canadian dollar strengthened to 1.4373 against the U.S. dollar. Additionally, the iShares MSCI Canada ETF (EWC) experienced a 0.5% increase in value.

The recent political crisis in Canada was caused by the sudden departure of former Trudeau ally and Deputy and Finance Minister Chrystia Freeland, who resigned in December due to disagreements over Ottawa's response to potential U.S. trade protectionism under President-elect Donald Trump's incoming administration.

Since her departure, Dominic LeBlanc has been appointed to lead the finance ministerial portfolio.

In 2015, Trudeau, 53, became Prime Minister and won re-election twice. However, after Freeland left, his voter popularity dropped to 19%, according to a poll by Abacus Data on December 17. On December 30, Angus Reid declared 2019 a "bruising year for federal Liberals" and assessed their support at just 16%, which is their weakest level since the institute began tracking in 2014.

The Conservative Party has a more than 20% lead in the polls and its leader, Pierre Poilievre, has received praise from Elon Musk for his "great interview."

Although many people are urging Trudeau to resign, he has not done so since December, and the Liberal Party does not have a way to remove its leader without consensus.

Singh, leader of the New Democratic Party, announced on Dec. 20 that he intends to introduce a motion to topple Trudeau's government, which would lead to an election.

"Justin Trudeau has failed in his primary responsibility as a prime minister, which is to work for the people rather than the powerful, according to Singh, as translated by CNBC," the article stated. "Despite making many beautiful promises, the liberals of Justin Trudeau have repeatedly let down the people."

In November, Trudeau presided over a Canadian economy that barely managed to keep inflation below its 2% target, but continues to struggle with household debt, rising unemployment, poor productivity, and intense exposure to the US, where President-elect Trump has already hinted at imposing 25% tariffs and annexation.

Last month, the differences over Canada's response to Trump's "aggressive economic nationalism" led to a split between Freeland and Trudeau.

"In her resignation letter, she emphasized the need to address the serious challenges posed by the United States and urged a determined effort to fight against "America First" economic nationalism in order to protect capital, investment, and the jobs they bring."

— CNBC's Fred Imbert contributed to this report.