US President Donald Trump has agreed to pause his plans to impose a 25 per cent tariff on Canada for 30 days after a call with Canadian Prime Minister Justin Trudeau. The decision came just hours before the tariffs were to take effect Tuesday.
Trudeau, after his telephone conversation with Trump on Monday, twice on the same day, took to X to state that he had a "good call" in the afternoon, the two leaders agreed to pause tariffs for at least 30 days.
He then added that in exchange for the deal, Canada is implementing a $1.3 billion border plan that will see it reinforce the border with new choppers, technology and personnel. Ottawa will also enhance coordination with the US to curb the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border, he added on X.
Canada is also planning to appoint a Fentanyl czar and plans are afoot to list Mexican cartels as terrorists. "I have also signed a new intelligence directive on organized crime and fentanyl, and we will be backing it with $200 million," Trudeau said.
But, analysts say it is not over yet and the government now has to brace for round 2. Trump has threatened to reinstate tariffs in 30 days unless he can reach a new economic deal with Canada. The US President has been talking about correcting unfair trade, raising revenue and negotiating with other countries.
Canadian officials told CBC News that Trump is not thrilled about the U.S. trade deficit with Canada. He believes the US was subsidising Canada.
"We're spending hundreds of billions a year to take care of Canada," Trump said at his news conference. "Why should we have a $200-billion deficit? Add on to that many, many other things that we give [Canada] in terms of subsidy."
Trump also said the U.S. does not need to import automobiles, lumber or dairy products from Canada.
Canadian analysts feel that if Trump feels the border measures are sufficient, Canada won’t face 25% tariffs across the board. But, there is still a threat of tariffs sector by sector.
