As Trump's tariffs loom yet again, Canada is left waiting to see what happens
U.S. cabinet official's words suggest Washington may not open with 25% tariffs
Canada is again staring down the barrel of massive U.S. tariffs on Canadian goods. With only days to go until U.S. President Donald Trump kicks off a trade war, Internal Trade Minister Anita Anand says Canada will need to wait and see what happens.
Anand, who met with U.S. officials in Washington this week, said Canada continues to stress that tariffs are harmful for both countries as the clock winds down to March 4 — when Trump will hit Canada with an economy-wide tariff of 25 per cent.
"We are steady at the wheel. We are prepared for any eventuality, but we will at every turn defend our country's economy," Anand said in an interview on Rosemary Barton Live.
On Sunday, U.S. Secretary of Commerce Howard Lutnick told Sunday Morning Futures on Fox News: "There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are — we're going to leave that for the president and his team to negotiate."
Lutnick's words suggest there's talk in Washington about going part-way and not unleashing the full tariff immediately. Canada-U.S. trade watcher Dan Ujczo predicted this possibility earlier this week in an interview with CBC News.
He said Trump would likely go for something in the middle — between backing away from tariffs and charging ahead full-steam.
"In the middle, there are a range of options," said Ujczo, senior counsel at Ohio-based Thompson Hine.
Those options include a tiny tariff that is scheduled to grow incrementally each month; a big tariff set to expire under certain conditions; and a delayed phase-in.
In anticipation of tariffs, Trump announced an executive order Sunday that sets the stage for ending duty-free shipment on low-value items, once tariff-collecting mechanisms are in place.
Currently, packages worth less than $800 US can be sent to the U.S. duty-free; Trump announced Sunday plans to end that — but not necessarily immediately. Sunday's order says the change will happen when his commerce secretary informs him the U.S. can collect tariffs on these parcels.
While recounting her conversations with U.S. lawmakers, Anand told host Rosemary Barton "the sense across the system is one of needing to wait and see what happens" on Tuesday, when the tariffs are slated to go into effect.
"We see numerous dates on different goods coming from the White House, and the only rational response from the Canadian government is the one that we are taking," Anand said, referring to Ottawa's earlier threat to impose $155 billion in countertariffs.
"We will put that out if and when the Trump administration comes forward with its proposed 25 per cent tariffs," Anand added.
To add to the uncertainty, Trump has also promised 25 per cent tariffs on all steel and aluminum imports, which he plans to impose on March 12. He's also threatened 25 per cent tariffs on auto, semiconductor and pharmaceutical imports as early as April 2.
Canada touts border efforts
Over the last two months, Canadian officials have spent time and money securing the Canada-U.S. border and cutting down the flow of migrants and deadly fentanyl into the United States — which Trump routinely argues motivates his tariffs.
Erin O'Gorman, president of the Canada Border Services Agency (CBSA), said on Rosemary Barton Live her agency is "surging on multiple fronts, including fentanyl, including on removals and really pushing the limits in terms of joint operations."
Data from the U.S. Customs and Border Protection (CBP) released this month shows there has been a 97 per cent drop in fentanyl seizures in January compared to December 2024, which the Canadian government says demonstrates its border security efforts are bearing fruit.
Even before these new efforts, Canada represented less than one per cent of all seized fentanyl imports into the U.S., according to federal data.
O'Gorman said for CBSA, there's "no fish too small in our pond" since even small amounts of fentanyl shipped down to the U.S. through envelopes "will likely kill some people."
Lutnick said the March 4 tariffs are "about the border, and both Mexico and Canada have done a reasonable job on the border…. But the fentanyl continues to come into this country and continues to murder our people."
Whatever decision is made on Tuesday about tariffs "won't be for lack of an incredible effort on the part of CBSA," O'Gorman said. "And that effort didn't start in October and it didn't start in the summer. It's what we always do."
Prime Minister Justin Trudeau, who's meeting with European leaders in London, told reporters Sunday "the facts establish very clearly that Canada is not an issue in terms of [being a] source of illegal fentanyl into the United States."
The price of instability
Former Quebec premier Jean Charest, who sits on the Prime Minister's Council on Canada-U.S. Relations, said on Rosemary Barton Live, "we have to pretty much assume that [the tariffs] are going to go ahead on Tuesday."
But Canada is already "paying a price now for the instability and for the uncertainty" of Trump's tariffs, Charest said. Some trader-watchers argue that's exactly what the U.S. president wants so companies shift production to the United States.
According to a report from consultancy firm KPMG, half of the 250 businesses in Canada that KPMG contacted "plan to shift investments or production to the U.S. to serve the U.S. market and reduce costs."
Most also said they had diverted or are considering diverting goods to countries not facing tariffs.
Charest said there's an opportunity now to "Rethink who we are as a country economically" and "how we run our federation," including pursuing trade deals with the European Union or more countries in Asia.
"Let's grab this moment for ourselves to build Canada and make it the country we want it to be," Charest said.
But at the end of it all, Charest said Canada "will have to come to terms with the fact we're going to live in a very different world."
"There's some people who think Mr. Trump one day will not be in office [and] things will return to normal," Charest said. "They will never return to what we knew as normal. There will be people after that."
While he expects change, Charest said he's optimistic about Canada's future and that the country will come out of this saga stronger than before.
"But we're going to have to stick together. We're going to have to do things that we have not done before in the past."
ABOUT THE AUTHOR
With files from Alex Panetta