Explainer: The 30-day moratorium on North American trade war
Canada waits to see if measures to meet Trump’s demands are enough to lift the tariff threat
Canada is in the midst of a 30-day pause on sweeping tariffs from the United States. (Nyamat Singh)
A wave of policy announcements have poured out of the White House during the first four weeks of Donald Trump’s presidency, targeting everything from the Paris Climate Accord to the initiation of a trade war with the United States’ closest economic partners.
On the afternoon of Feb. 3, following a phone call with Trump, Canadian Prime Minister Justin Trudeau announced a 30-day pause on proposed tariffs on Canada after the president heard Canada’s $1.3-billion plan to shore up borders and appoint a “fentanyl czar.”
In the meantime, North America is holding its breath to see if Trump will move forward with his tariff promises after the moratorium.
On Feb. 1, Trump signed sweeping 25-per-cent tariffs on goods imported into the U.S. from Canada, with a lower 10-per-cent tariffs on Canadian energy. In the order, Mexico also faces 25-per-cent tariffs on its goods, with China seeing 10 per cent in addition to existing tariffs. Trump has also imposed 25-per-cent tariffs on all steel and aluminum imports from Canada and Mexico. These tariffs take effect on March 4.
The president cited fentanyl and illegal immigrants crossing into the U.S. as the reasons for toughening up trade. The White House fact sheet noted that the tariffs would not be lifted until the “crisis is alleviated,” however the Canadian government reported that less than one per cent of fentanyl and illegal crossings into the U.S. come from Canada.
Prime Minister Justin Trudeau has since said he believes Trump is determined to annex Canada in part due to this country’s valuable natural resources. Trump has also said that if Canada wants to avoid tariffs, it should become the 51st U.S. state, and has publicly referred to Trudeau as “Governor Trudeau” on social media.
In response to the 25-per-cent tariff threat, Canada, Mexico, and China all announced retaliatory tariffs, despite Trump’s promise to escalate his tariff measures should the countries issue them. Canada promised 25-per-cent tariffs on $155 billion worth of U.S. goods to be rolled out in two phases spaced 21 days apart.
Several provinces also announced their own retaliatory measures, including British Columbia. Premier David Eby said the province would ban liquor purchases from “red states” and direct provincial and Crown branches to purchase “Canadian goods and services first.”
These measures have since been rolled back with the 30-day pause.
Last month, under the threat of the potential incoming tariff announcement, the B.C. government said it would be appointing a new cabinet committee tasked with “co-ordinating the whole-of-government approach to protect B.C.’s workers, businesses and economy against ongoing tariff threats from the United States.”
The province also said the committee would act as a “day-to-day war room” by organizing actions to fight back and grow the economy.
The U.S. is B.C.’s largest trading partner with more than half of all 2023 exports going across the border.
A preliminary assessment done by the province last month found 25-per-cent tariffs from the U.S. would mean the B.C. economy would see a loss of $69 billion over three years and lose more than 120,000 jobs.
“President Trump’s 25-per-cent tariffs are a complete betrayal of the historic bond between our countries and a declaration of economic war against a trusted ally,” Eby said in a press release.
“As British Columbians, and as Canadians, we will stand strong and united in the face of this unprecedented attack.”
