
Trump Holds Off on Threatened Tariffs on First Day
New U.S. President Donald Trump held off on imposing threatened 25% tariffs on Canada as he took office Monday.
But, hours after his inauguration, Trump said he could still implement them Feb. 1.
“We took note, obviously, of what President Trump said earlier today in Washington. None of this should be surprising,” Finance Minister Dominic LeBlanc told reporters Monday at a Liberal cabinet retreat in Montebello, Que., moments after Trump’s remarks. “The one thing we’ve learned is that President Trump, at moments, can be unpredictable.”
Trump made the statement while signing executive orders at the White House, citing illegal migration and the trafficking of fentanyl at the border. He vowed to invoke similar 25% trade penalties on U.S. imports from Mexico.
Trump’s positing Monday came after he appeared to give Canadian manufactures a moment to breathe a sigh of relief. Canadian manufacturers called last week on the federal government to introduce investment incentives and tax relief as the looming threat of the U.S. tariffs puts the country’s industrial base at risk.
Trump’s policy has implications for Canadian industrial release estate as facility owners, many of whom are American companies, contemplate whether to start new projects or relocate to the U.S. to avoid the impact of the would-be tariffs.
Following Trump’s inauguration speech, federal and provincial leaders had expressed cautious optimism as U.S. media reports indicated that he would only sign a memorandum directing federal agencies to study trade issues with Canada, Mexico, and China.
“There’s nothing new this evening than was different than a week ago,” LeBlanc told reporters late Monday.
“We have spent the last number of weeks preparing potential response scenarios for the Government of Canada in partnership with provinces and Canadian business leaders and union leaders,” LeBlanc said. “So our country is absolutely ready to respond to any one of these scenarios.”
Foreign Affairs Minister Mélanie Joly also sought to reassure Canadians.
“We need to continue to fight for our interests, to defend jobs across the country, and we’re calling every single political leader across the board, across the country, to stand united,” Joly told reporters Monday night.
Canadian Manufacturers & Exporters (CME) President and CEO Dennis Darby has urged the federal government to act swiftly, warning that the new U.S. trade policies could severely disrupt the sector, which contributes $213 billion to Canada’s GDP and supports about 5.3 million jobs.
Darby called on Ottawa to take a proactive approach by introducing incentives that encourage manufacturers to proceed with planned investments and reshore production to Canada. According to a recent survey, almost half (45%) of CME members expect to cancel or delay planned capital investments if Trump’s tariffs proceed.
During his inauguration speech Trump vowed to overhaul the U.S. trade system immediately by following through on the new External Revenue Service, an idea that he floated in recent weeks.
The ERS is slated to collect all revenues related to tariffs and duties.
The Canadian government has been strategizing on potential countervailing duties to offset the anticipated tariffs.
Ontario Premier Doug Ford is wary of Trump’s next moves.
“He did say that he’s going to apply tariffs across the board, and I feel he’s going to be targeting Canada, specifically Ontario, because we’re the manufacturing might,” Ford told CTV on Monday. “And, it’s very concerning.”
Ford has been vocal in pushing back against Trump’s tariff threats and his comments about using “economic force” to annex Canada.
“These are going to be negotiations that are going to go on for quite some time right now,” Ford said. “Make no mistake about it, he’s coming for us. Is it tomorrow? Or is it a month down the road? But it’s very concerning.”
However, Alberta Premier Danielle Smith called for Canada to focus on building its cross-border relationship with the U.S. to avoid the tariffs altogether.
“There’s still obviously irritants in the relationship between Canada and the U.S., and I think this gives us an opportunity to address some of those,” Smith told CTV News.
Photo: Anna Moneymaker / Shutterstock.com
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