U.S. tariffs on Canadian goods paused for 30 days: Trudeau

CITYnews halifax / By The Canadian Press

Canadian Prime Minister Justin Trudeau says U.S. President Donald Trump has agreed to pause a 25 per cent tariff on Canadian goods after Trudeau promised to bolster border security.

The tarrifs were set to go into effect on Tuesday, but will now be paused for at least 30 days while the two sides work towards a permanent deal.

The news comes after the second phone call between the two leaders on Monday.

Some of the new measures include appointing a Fentanyl Czar, listing cartels as terrorists, and launching a new Canada-U.S. Joint Strike Force to combat organized crime.

When asked about the call with Trudeau, Trump had just said it “went well.”

Trump spoke to reporters in the Oval Office Monday after striking the same deal with his Mexican counterpart to delay the imposition of 25 per cent tariffs on that country.

Trump’s stated rationale for the tariffs — which would be 10 per cent on energy and 25 per cent on everything else — is the need to exert pressure on Canada to stop the flow of illegal drugs and migrants into the U.S.

But Trump also has cited the United States’ trade deficit with Canada, which is based almost entirely on Canadian oil and gas exports to the U.S. He has said Canada can avoid the tariffs if it becomes a state and has suggested he would use “economic force” to make that happen.

“What I’d like to see? Canada become our 51st state,” he said Monday, adding “we don’t need them for anything.”

He also raised new grievances about the financial sector and claimed again that Canada is unfair to the U.S.

“We’re not treated well by Canada, and we have to be treated well,” he said, adding he had a number of questions for Trudeau when they spoke Monday morning, including one about why American banks aren’t operating in Canada.

“I think we’ll win most of the subjects, but for some reason a lot of things have been very unfair with Canada.”

The Canadian Bankers Association said Monday in a statement that there are 16 U.S.-based bank subsidiaries and branches in Canada, with combined assets amount to more than $113 billion. That amounts to about half of all foreign bank assets in the country.

On Saturday, Trump signed executive orders that laid out a plan to hit Canada and Mexico with tariffs on Tuesday. He also added another 10 per cent tariff on Chinese goods.

On Monday morning, Mexican President Claudia Sheinbaum said that she’s agreed to send 10,000 troops to the U.S. border to combat drug trafficking. Mexico first sent troops to its northern border in 2019, citing pressure from the U.S. to curb migration.

Trump said on Truth Social that after a “very friendly conversation” with Sheinbaum, he had agreed to pause the imposition of tariffs on Mexico for one month to allow for negotiations.

“I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries,” Trump said.

Trump relied upon the International Emergency Economic Powers Act to declare an economic emergency that allowed him to bypass Congress and impose the tariffs on his own.

The executive orders say the levies are a response to illegal immigration and drug smuggling. The order related to Canada says Mexican cartels are operating in the country and claims the modest amount of fentanyl intercepted at the northern border would be enough to kill “9.5 million Americans.”

Trump also has said repeatedly he thinks tariffs are “beautiful” and claims they can make the U.S. wealthier, despite the short-term pain for businesses and consumers.

Trump’s tariffs are being condemned by American business and labour groups, including the National Association of Homebuilders, the United Steelworkers International and the U.S. Chamber of Commerce.

“The imposition of tariffs under IEEPA is unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains,” John Murphy, the chamber’s senior vice-president and head of international, said in a Saturday statement.

Both Canada and Mexico promised to strike back with counter-tariffs over the weekend, paving the way for a possible trade war.

Ottawa’s counter-tariff plan would have begun on Tuesday with 25 per cent tariffs on $30 billion in goods originating in the U.S.

In three weeks, after consulting with industry, the federal government plans to impose tariffs on another $125 billion in U.S. goods.

Trudeau said additional non-tariff measures are also being discussed by the federal and provincial governments, including some related to critical minerals, energy and procurement.

Ottawa laid out a $1.3-billion border plan in December that will add personnel, helicopters, drones, drug-sniffing dogs and surveillance towers to the border.

Trudeau met with opposition leaders on Sunday to discuss the Canadian response to tariffs. Green Party Leader Elizabeth May said Trudeau told them it’s “increasingly clear” that nothing more Canada does on the border would make a difference.

She said Trudeau told them Trump’s tariff policy “was not really about fentanyl. It was about Canada and our sovereignty.”

Premiers have laid out plans for their own countermeasures. Several provinces have pledged to stop buying U.S. alcohol and to remove it from the shelves of provincial liquor stores, while others, including Ontario, will bar American companies from provincial contracts.

Conservative Leader Pierre Poilievre also called on the government to send Canadian Armed Forces troops and helicopters to the border.

“We need a Canada first agenda that will protect us against these unfair and unjustifiable tariffs,” he said Monday, adding the plan must include retaliatory tariffs, measures to strengthen the border and a tax cut.

“That is how we become stronger, more self-reliant, and less hopelessly dependent on foreign powers and foreign governments.”

He also repeated his call for the Liberal government to reconvene Parliament to debate and pass measures to oppose the tariffs.

Trudeau prorogued Parliament until March 24 while the Liberal party chooses its next leader. The government can impose retaliatory tariffs without recalling Parliament but any legislative changes or major aid packages would require parliamentary approval.

— With files from The Associated Press