[CTC] Canada Follows Mexico in Reaching Deal to Delay Trump Tariffs

[Arthur Stamoulis]

https://www.nytimes.com/live/2025/02/03/us/trump-tariffs
Canada Follows Mexico in Reaching Deal to Delay Trump Tariffs

The leaders of Mexico and Canada each said they had struck agreements to pause tariffs for 30 days, but levies on products from China were still set to take effect just after midnight.

President Trump and the leaders of Mexico and Canada struck last-minute deals on Monday to postpone the imposition of hefty tariffs on goods exported to the United States, averting at least temporarily a damaging trade war that would roil North America and the global economy.

Canadian Prime Minister Justin Trudeau, after speaking twice by telephone with Mr. Trump, said the tariffs would be postponed by 30 days as the two countries negotiate a border deal. That announcement came hours after Mexico negotiated a similar delay, and agreed to send thousands of troops to the U.S.-Mexico border to curb drug smuggling and illegal immigration.

The frenzy of last-minute maneuvering demonstrated Mr. Trump’s willingness to use tariffs as a source of leverage <https://www.nytimes.com/live/2025/02/03/us/trump-tariffs#trump-economy-threats> against America’s most important trading partners. Imports from Mexico, Canada and China — another target of tariffs that were still set to take effect just after midnight — account for more than a third of the products brought into the United States each year.

After their call — which Mr. Trump described as “very good” — Mr. Trudeau announced the delay in a social media post. As part of the agreement, he said, Canada would help form a “Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.”

“I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million,” Mr. Trudeau said.

Mr. Trump said earlier that he would likely discuss the tariffs with China’s leader, Xi Jinping, within the next 24 hours. However, he described the 10 percent tariffs that he planned to impose on Chinese imports as an “opening salvo.”

China was still preparing its response on Monday. Its ambassador to the United Nations, Fu Cong, said on Monday that China was filing a complaint with the World Trade Organization over Mr. Trump’s tariffs and would consider retaliatory action.

Here’s what else to know:

Border motivations: Mr. Trump signed executive orders on Saturday <https://www.nytimes.com/2025/02/01/us/politics/canada-mexico-china-trump-tariffs.html> to impose tariffs of 25 percent against Mexico and Canada, with a partial carve-out for Canadian energy and oil exports, and 10 percent against China. The president said he would impose the tariffs until the countries alleviated the flow of migrants and drugs, particularly fentanyl, to the United States. The tariffs threatened to raise the cost of online goods <https://www.nytimes.com/live/2025/02/03/us/trump-tariffs#trump-tariffs-shein-temu-loophole> while the possibility of a far-reaching trade war roiled markets around the world <https://www.nytimes.com/2025/02/02/business/stocks-trump-tariffs.html>.

Mexico’s reprieve: Ms. Sheinbaum said during a news conference in Mexico City that she had reached the agreement with Mr. Trump after a “very respectful” conversation. Under the deal, Mexico received a one-month delay and a promise from the United States to help stanch the movement of guns back over the border, Ms. Sheinbaum said. Both leaders sounded optimistic on Monday: Ms. Sheinbaum said she was sure the coming month would yield “good results,” while Mr. Trump wrote in a social media post that he looked forward to taking part in further negotiations.

Canada’s response: A senior Canadian government official familiar with the call between Mr. Trump and Mr. Trudeau this morning was not optimistic about the possibility that Canada would be able to get a similar reprieve, saying that the situation was still in flux. Canada has released a list with hundreds of American goods, from liquor to dishwashers <https://www.nytimes.com/live/2025/02/03/us/trump-tariffs/from-liquor-to-dishwashers-canada-details-us-goods-it-will-hit-with-tariffs?smid=url-share>, that would face 25 percent tariffs starting Tuesday. The agreement between the United States and Mexico leaves Canada in a perilous position <https://www.nytimes.com/live/2025/02/03/us/trump-tariffs/canada-is-in-a-perilous-spot-after-trump-cut-tariff-deal-with-mexico>.

Focus on fentanyl: In calling for the tariffs, Mr. Trump highlighted the need to stop the flow of fentanyl, a potent synthetic opioid, into the United States. The president raised the “drug war” with Mr. Trudeau in their call on Monday morning, but far less of the drug comes into the country from Canada. Last year, U.S. Customs and Border Protection agents intercepted about 19 kilograms of fentanyl at the northern border <https://www.nytimes.com/2025/01/30/world/canada/canada-fentanyl-trump.html>, compared with almost 9,600 kilograms at the border with Mexico, where cartel mass-produce the drug.

Automakers relieved: The U.S. auto industry dodged a supply chain catastrophe after Mr. Trump delayed tariffs on products from Mexico for at least a month. But automakers still face severe disruptions, and car buyers may see major price increases, if he doesn’t grant similar relief to Canada. Read more › <https://www.nytimes.com/live/2025/02/03/us/trump-tariffs#trump-tariffs-auto-mexico-canada>
Europe may be next: Mr. Trump has signaled that Europe could be his next target, telling the BBC that tariffs “will definitely happen with the European Union” and could come “pretty soon.” European leaders responded on Monday that a trade war with the United States would destabilize economies on both sides of the Atlantic Ocean. Read more › <https://www.nytimes.com/live/2025/02/03/us/trump-tariffs#trump-tariffs-european-union>


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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