Trump muses about slapping 25% tariffs on Canada Feb. 1

U.S. President Donald Trump has suggested that he could still hit Canada with tariffs as early as next month, citing concerns about border security and the flow of illegal substances into the United States. Trump reiterated his threat to impose a sweeping 25 per cent tariff on both Canada and Mexico, stating that he is considering implementing them on February 1st.

The president, who was sworn in on Monday, has been signaling since November that he would introduce tariffs on Canada and Mexico. Although he initially promised to do so on his first day in office, reports from U.S. media outlets indicated that the tariffs would not be implemented immediately. In response to Trump’s latest comments, Foreign Affairs Minister Mélanie Joly and Finance Minister Dominic LeBlanc stated that the Canadian government is working to persuade the new administration that tariffs would also hurt the U.S. economy, but Canada is prepared to respond if necessary.

A 25 per cent tariff would be particularly devastating to Canada, with experts estimating that even a 10 per cent levy could shave billions of dollars off the GDP and potentially plunge the country into a recession. Canada has already drawn up a plan to impose retaliatory tariffs on $37 billion worth of American goods if Trump moves forward with trade action.

Trump issued a memo on Monday night ordering U.S. departments to investigate the causes of the country’s trade deficits and the economic and national security implications of those deficits. The memo also called for a review of the Canada-U.S.-Mexico Agreement (CUSMA) and an investigation into unlawful migration and fentanyl flows from Canada, Mexico, and China. The border security study and trade deficit study are to be completed by April 1st.

Canada’s Ambassador to the U.S., Kirsten Hillman, has been lobbying Trump officials to drop the tariff plan, emphasizing the negative impact it would have on both countries. Ontario Premier Doug Ford expressed concerns that Canada, specifically Ontario, would be targeted by the tariffs and suggested that he may call an election to address the threat and potential fallout.

While Trump could still impose the threatened tariffs at any time, his decision to focus on other priorities initially is seen as a victory for Canada. The Canadian government has announced a $1.3 billion border package to enhance border security and has shown a willingness to engage with the U.S. on the issue of illegal substances and migrants.

Alberta Premier Danielle Smith, who is in Washington for inauguration-related events, advised the federal government and the premiers to focus on diplomacy and refrain from retaliatory measures. Smith’s solution, crafted after meetings with U.S. officials, suggests ramping up oil exports to the U.S. as a way to address the tariff issues.