U.S. President Donald Trump Trump is pausing tariffs on some Canadian until April 2, potentially providing a much-needed relief to Canada’s Economy. It only applies to a selection of products. However, mixed signals from the White House suggest the unpredictability of U.S. trade policies may continue to pose significant challenges for Canadian exporters.
A Brief Reprieve for Canada
The latest developments in U.S.-Canada trade relations reflect ongoing tensions characterised by chaos and unpredictability. President Trump’s decision to pause tariffs comes as welcome news to Canadian businesses grappling with the potential economic fallout from a punitive 25 per cent levy.
However, the intricacies surrounding compliance with the Canada-U.S.-Mexico Agreement (CUSMA) indicate that uncertainty is far from resolved.
What we know so far: Trump is pausing tariffs on some Canadian goods
- Trump is pausing tariffs on some Canadian goods until April 2
- The revived tariff pause applies only to Canadian exports that meet CUSMA compliance.
- Approximately 62 per cent of imports from Canada may still be subject to the 25 per cent tariffs.
- Ontario and British Columbia have announced retaliatory measures in light of ongoing trade tensions.
- Targeted tariffs on steel and aluminium imports from Canada remain imminent.
- Prime Minister Justin Trudeau described a recent call with Trump as heated and “colourful,” indicating persistent friction in negotiations.
CUSMA-compliant products
In a background briefing, a White House official indicated that while some Canadian goods would see tariff relief, the exception only pertains to CUSMA-compliant products. This poses a dilemma for many in Canada, with exporters prior opting for a “most favoured nation” tariff rate rather than navigate the complexities of CUSMA’s rules-of-origin policies.
With more than half of Canadian imports potentially unaffected, Ottawa’s reaction to Trump’s announcement has been cautious. A senior government official advised that Canadian authorities would wait to fully analyse the implications of the impending adjustments before responding.
Adding to the mix, Ontario Premier Doug Ford announced plans for a 25 per cent levy on electricity exports to several U.S. states, a move underscoring the provincial government’s commitment to retaliate against what they perceive as continuous threats. Ford remarked, “This whole thing with President Trump is a mess… He still threatens the tariffs on April 2.”
Meanwhile, British Columbia Premier David Eby reiterated the resolve of Canadian leaders, stating, “Yet again the president is sowing uncertainty and chaos, attempting to undermine our economy.” Eby vowed that Canadians would continue to push for the removal of tariffs.
Tariffs on Metals Move Forward
Despite an apparent easing on certain goods, Trump reiterated that a 25 per cent tariff on steel and aluminium imports would commence next week. This decision looms large for Canada, the U.S.’s primary supplier of both metals, and raises fears of another decline in exports akin to the challenges faced in 2019 following similar tariffs.
During the previous day’s discussions between Trump and Trudeau, the call was described as intense, with both leaders expressing strong opinions on sensitive issues, including dairy and fentanyl. According to a senior government official who was privy to the conversation, Trump displayed exasperation, using profanity during discussions about dairy negotiations, a long-standing irritant in U.S.-Canada trade relations.
As the U.S. grapples with its own border control issues concerning fentanyl, Trudeau defended Canada, asserting that the statistics suggested by U.S. border seizure data do not substantiate claims of Canada as a significant issue.
The exchange culminated with both leaders agreeing to allow their teams to explore the feasibility of exempting CUSMA-compliant products from tariffs—a potential path towards reducing trade tensions, though Trudeau remains sceptical about the long-term outlook.
“It seems President Trump is committed to tariffs… we will continue to be in a trade war that was launched for the U.S. for the foreseeable future,” remarked Trudeau.
With a backdrop of robust trade alliances and negotiation strategies, Canada continues to stand firm. “Our goal is to get all tariffs removed… Canadians are united in standing up for our country,” Trudeau concluded as he prepared the nation for the ongoing turbulent relationship with the U.S.