Cabinet meets at Quebec resort as Trudeau says Canada spared tariffs for now

Prime Minister Justin Trudeau praised Canada's "mutually beneficial relationship" with the U.S. while congratulating President Donald Trump as he officially takes office — but Trudeau stressed that his government will defend Canadians' interests.

"Canada and the United States have the world's most successful economic partnership," wrote Trudeau in a statement following Trump's inauguration Monday.

"We are strongest when we work together, and I look forward to working with President Trump, his administration, members of the United States Congress and officials at the state and local levels to deliver prosperity for our peoples — while protecting and defending the interests of Canadians." 

Trudeau's statement comes amid reports that Trump will not impose his promised tariffs on Canada, Mexico or China on his first day in office as previously teased. 

A U.S. official confirmed to Reuters that Trump will hold off for now and instead direct agencies in a memo to "investigate and remedy persistent trade deficits and address unfair trade and currency policies by other nations."

The memo will single out China, Canada and Mexico for scrutiny but not announce new tariffs, the official said.

It offers the Liberal government a moment of reprieve — although it's unclear how long that will last. 

"Perhaps he's made the decision to sort of suspend the threat of tariffs. We'll wait and see," Finance Minister Dominic LeBlanc told CBC News on Monday.

"Our job is to make sure we're ready for every scenario."

The federal cabinet is expected to discuss those scenarios as it gathers for a retreat at the Château Montebello resort Monday and Tuesday, in western Quebec about an hour east of Ottawa.

Trudeau did not answer reporters' questions on his way into the meeting, but a Radio-Canada reporter was able to ask "no tariffs for now?" as he walked past.

"For now," the prime minister responded in French. 

Canada's ambassador to the United States, Kirsten Hillman, said she was pleased to read the reports but is "cautiously optimistic."

"I will feel better, I think, when we see the details of what he's asking for in terms of a study," she told CBC News.

"So I'm grateful for that but the work is not done."

Cabinet meets as Liberal leadership race heats up

The federal government has made clear it's prepared to impose retaliatory tariffs on the U.S. if Trump eventually moves ahead with any trade action. Officials have already drawn up a plan that will levy immediate tariffs on $37-billion worth of American goods if Trump moves against Canada.

When Trump first threatened to hit Canada and Mexico with steep tariffs back in November, he cited concerns about border security, migrants and illegal drugs, especially fentanyl. He's also talked about United States' trade deficit with Canada.

Last month, the federal government committed to $1.3 billion in spending to strengthen surveillance of the Canada-U.S. border, including buying dozens of drones and leasing helicopters.

The cabinet is also meeting as the party undergoes a leadership campaign to replace Trudeau. 

So far six people have thrown their hat in the ring: former government House leader Karina Gould, former finance minister Chrystia Freeland, former Bank of Canada governor Mark Carney, Nova Scotia MP Jaime Battiste, Ottawa MP Chandra Arya and former Montreal MP and businessman Frank Baylis.