Trump to pause promised tariffs for 30 days after speaking with Trudeau
John Paul Tasker | CBC News | Posted: February 3, 2025 2:34 PM | Last Updated: February 4
PM to appoint fentanyl 'czar,' will list Mexican cartels as terrorists
U.S. President Donald Trump dropped his plan to levy tariffs on Canada for at least 30 days after Prime Minister Justin Trudeau made a series of commitments on Monday to improve border security.
That means there's a ceasefire in a trade war that had the potential to inflict major economic pain on workers and businesses on both sides of the border.
The country can let out a collective sigh of relief — at least for now. Trump signalled he's not yet done with Canada, saying today he's still looking for some sort of "final economic deal" with the country down the line.
To get Trump to shelve his punishing tariffs, Trudeau told him Canada is pressing ahead with a previously announced $1.3-billion border security plan that includes reinforcing the 49th parallel with new choppers, technology and personnel and stepping up its co-ordination with American officials to crack down on Trump's stated priorities: illegal drugs and migrants.
Trudeau said, all told, there will be 10,000 front-line personnel working along the border as part of a push to make it safer.
WATCH | Trump and Trudeau strike deal for 30-day pause of tariffs:
The prime minister also made a series of new commitments to Trump, including a promise to appoint a new fentanyl "czar." And he promised to list Mexican cartels, the top purveyors of fentanyl and other drugs in Canada and the U.S., as terrorists under Canadian law.
Trudeau said Canada is launching a "Canada-U.S. Joint Strike Force," that will be tasked with combatting organized crime and money laundering — and he's kicking in $200 million in funding to get it off the ground.
"Proposed tariffs will be paused for at least 30 days while we work together," Trudeau said in a social media post after he wrapped up a 45-minute call with Trump — his second of the day.
Trump said in his own social media post that he was "very pleased" Canada has a plan in place to secure the northern border. But Trump called this just an "initial outcome."
"The tariffs announced on Saturday will be paused for a 30-day period to see whether or not a final economic deal with Canada can be structured," he said.
Figures from U.S. Customs and Border Protection (CBP) show the agency seized 19.5 kilograms of fentanyl at the northern border last year, compared to 9,570 kilograms at the southwestern one.
But that hasn't stopped Trump from demanding Canada take a harder line on the drug, which is the leading cause of death for Americans aged 18 to 45, according to the U.S. National Center for Health Statistics.
Even before today's offer to appoint a "czar" and spend more money to police the border, the federal Liberal government showed a willingness to tackle the issue to assuage Trump's concerns.
"Less than one per cent of fentanyl seized in the U.S. is traced to Canada — that's one per cent too much," Finance Minister Dominic LeBlanc said in an interview with CBC News on Sunday.
"We have exactly the same views as the American government in terms of the importance of this. We're not the significant source of the challenge but we want to be very much part of a joint solution. We're prepared to step up and do more," he said.
WATCH | Trump says Canada would become 51st state 'if people wanted to play the game right':
Speaking to reporters in the Oval Office after the first of two calls with Trudeau on Monday, Trump said Canada is "very tough" and "we're not treated well by Canada and we have to be treated well."
He claimed Canada "doesn't take our agricultural products, for the most part." It's an outlandish statement because the U.S. is Canada's largest agricultural trading partner, according to data from Trump's own government, representing some 57 per cent of Canadian food imports.
The president has said for weeks he would like Canada to join the United States as the 51st state. It's a line he repeated on Monday, saying he would "love to see" Canada join the union. But he seemed to acknowledge it "would be a long shot," saying some unnamed people "don't have a threshold for pain."
Trump also came to a deal with Mexican President Claudia Sheinbaum earlier Monday to "pause" the tariffs he threatened to impose on that country.
WATCH | Mexican President Sheinbaum says U.S. tariffs on her country delayed for 1 month:
Sheinbaum said in a social media post she had a "good conversation" with the president after she agreed to deploy 10,000 Mexican national guard troops to the U.S. border.
After the news of Sheinbaum's deal broke, some Conservative politicians in Canada called for the federal government to deploy the military to the Canada-U.S. border, which was almost entirely demilitarized after the War of 1812 more than 200 years ago.
Conservative Leader Pierre Poilievre asked Trudeau to "send Canadian Forces troops, helicopters and surveillance to the border now" to try and save the Canada-U.S. trade relationship and address Trump's concerns about drugs and migrants.
He called for the hiring of "at least" 2,000 more Canada Border Services Agency (CBSA) agents to bolster the law-enforcement agency that's responsible for border control.
Saskatchewan Premier Scott Moe also asked the federal government to put the CBSA under military command to "address concerns President Trump has raised."
The $2.6 billion Ottawa spends every year on CBSA could then be reclassified as military spending, helping the country chip away at its NATO commitment to spend two per cent of its GDP on defence, Moe said. Trump has repeatedly criticized Canada's low defence spending.
New focus: Banking
In a social media post after his first call with Trudeau wrapped up earlier Monday, Trump chastised Canada for not allowing U.S. banks to "open or do business there."
Until this point, Trump has framed the threatened tariffs as a way to hit back at Canada for the ongoing trade deficit and supposed inaction on drugs and migrants crossing the northern border into the U.S. — his apparent concerns about banking fairness are a new development.
A number of American banks do business in Canada with large lending and commercial and investment banking operations, among other functions, on this side of the border.
There are 16 U.S.-based bank subsidiaries and branches in Canada holding about $113 billion in assets, according to the Canadian Bankers Association.
Personal banking in Canada is largely the domain of Canadian-based banks, due to stringent federal regulations designed to protect against bank failures. According to government figures, Canada's large banks hold more than 93 per cent of all domestic banking assets. Canadian banks are routinely ranked among the safest in the world.
WATCH | Canada hits back after Trump imposes 25% tariffs:
Last night, Trump also raised the Canadian banking system with reporters after landing back in D.C. after a weekend at his Florida estate.
"Canada's been very abusive of the United States for many years. They don't allow our banks. Did you know that? Canada does not allow banks to go in. If you think about it, that's pretty amazing," he said.
Trump launched the first salvo in this trade dispute when he announced Saturday he would slap a 25 per cent tariff on virtually all Canadian goods with a lower rate — 10 per cent — for the country's energy products.
Trump said he was delivering on a campaign promise to seek retribution from countries he claims are "ripping off" the U.S.
Trump is fixated on the Canada-U.S. trade deficit, which is largely driven by American demand for cheaper Canadian oil. When oil exports are excluded, the Americans actually have a trade surplus with Canada, according to Canadian government data.
Speaking to Canadians late Saturday night after Trump released details of his tariff threat, Trudeau said, after more than a century of friendship and collaboration through world wars and natural disasters and a whole host of shared challenges, Canada doesn't want conflict with the U.S.
"We don't want to be here, we didn't ask for this, but we will not back down," he said. "We will not back down in standing up both for Canadians and for the incredible, successful relationship and partnership between Canada and the United States."