Trump pauses 25% tariffs on Canadian goods after deal with Trudeau

President Trump pushed pause Monday on his plan for 25% tariffs on goods imported from Canada for a month after last-minute talks with Prime Minister Justin Trudeau produced a deal, potentially averting a costly trade war between two of the world’s closest allies and strongest trading partners.

After what he called a “good call” with Trump, Trudeau said Canada would be implementing tougher border security to fight illegal immigration and drug trafficking along the nation’s shared border.

“Proposed tariffs will be paused for at least 30 days while we work together,” Trudeau said on Monday, Feb. 3.

The deal, including $1.3 million in beefed-up border security and more troops, mirrored a similar agreement Trump forged with Mexican President Claudia Sheinbaum earlier in the day.

The levy on everything from Canadian timber and cars had been set to go into effect at midnight.

Canadian workers started pulling American booze off the shelves of government-run liquor stores in several provinces even before the U.S. tariffs went into effect.

Trudeau had threatened to counter Trump’s tariffs with an aggressive package of tit-for-tat Canadian taxes on American-made products, especially those made in pro-Trump states, like Kentucky bourbon. He warned more products would be added to the list if the dispute is not resolved quickly.

In a sign of a more damaging rift between the two strong allies, Canadian sports fans over the weekend started booing the national anthem at National Hockey League and National Basketball Association games in protest of Trump’s actions.

The north-of-the-border ally is responsible for only a tiny fraction of the undocumented immigration and illicit drugs that flow into the U.S according to data from the Drug Enforcement Administration.

Before the afternoon talk, Trump complained about the large trade deficit the U.S. runs with its neighbor and repeated his desire to force Canada to join the U.S.

“What I’d like to see (is) Canada become our 51st state,” Trump said. Canadian leaders from across the political spectrum scoff at the idea of joining the U.S.

If they ever happen, tariffs on Canada could see gasoline prices increase sharply at the pump, especially in the Midwest where Canadian crude oil makes up a larger share of refined petroleum products than elsewhere.

New car prices would be expected to jump significantly because automakers have closely integrated assembly lines in Canada and Mexico into their supply chains.

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