Canada's governing Liberal Party announced on Thursday that it will hold a leadership election on March 9 to choose Prime Minister Justin Trudeau's successor.

Trudeau said on Monday that he is going to step down as party leader and prime minister. He has led the government since 2015. The decision was made amid a slump in his approval ratings. The dip in support was due to his handling of inflation and other issues.

Canadian media outlets have named Chrystia Freeland as a leading candidate. Freeland, who was at odds with Trudeau, abruptly stepped down as deputy prime minister and finance minister last month.

Former central bank governor Mark Carney has been listed as another leading candidate.

Whoever becomes the next Canadian prime minister will need to work with the incoming administration of Donald Trump.

Trump has said that he will impose tariffs of 25 percent on all imports from Canada, unless it halts the flow of "crime and drugs" across the border into the United States.

In an interview with CNN on Thursday, Trudeau said that if Trump moves forward with the tariffs, "everything the American consumers buy from Canada is suddenly going to get a lot more expensive."

Trudeau was referring to oil, gas, lumber and other major export items from Canada.