WASHINGTON — Canada is waiting to see whether U.S. President Donald Trump follows through on his threat to impose economy-wide tariffs — or whether another last-minute pause materializes, averting a North American trade war.
U.S. Commerce Secretary Howard Lutnick said tariffs would be levied Tuesday against Canada and Mexico, but the levels remained to be seen.
"Exactly what they are, we're going to leave that for the president and his team to negotiate," Lutnick said in an interview broadcast Sunday on Fox News.
Trump's executive order to implement 25 per cent tariffs on all Canadian products, with a lower 10 per cent levy on energy, was delayed until Tuesday after Canada agreed to introduce new security measures at the border.
Despite the boost in border security and a weeks-long diplomatic push by Canadian officials in Washington, Trump said last Thursday the steep duties would move forward.
Lutnick said Mexico and Canada had done a "reasonable" job on the border but the billionaire financier said fentanyl continues to enter the United States. He said Trump is still considering "how exactly he wants to play it" with America's closest neighbours, describing it as a fluid situation.
U.S. Customs and Border Patrol data shows the number of people and drugs crossing illegally into the United States from Canada is minuscule compared to the volume coming across the southern border. It reports just 13.6 grams of fentanyl seized by northern Border Patrol staff in January.
Despite a month-long diplomatic push by Canadian officials and premiers, it remains unclear what Canada could do to persuade Trump to drop the tariff threats for good.
Prime Minister Justin Trudeau has said if the levies go into force, Ottawa will revive its previously announced plan for retaliatory tariffs.
Those were to begin with an initial 25 per cent levy on $30 billion in U.S. products, with duties on another $125 billion in goods to follow three weeks later.
While members of Trump's team hit U.S. news networks over the weekend to argue that the tariffs would help Americans, many economists warn they will raise household costs.
A report from the Peterson Institute for International Economics issued last month said Trump's tariffs on Canada, Mexico and China would cost the typical U.S. household more than US $1,200 a year.
Treasury Secretary Scott Bessent called that report "alarmist." On CBS’ Face the Nation on Sunday, Bessent called Trump's plan "holistic" and said "there will be tariffs, there will be cuts in regulation, there will be cheaper energy."
He said that Mexico has proposed matching Washington’s tariffs on China and Canada should do the same, leaving room for areas of negotiation.
When asked whether that action would thwart the tariff threat, Bessent replied that "maybe the tariff wall goes up, and then we see what happens from there."
This report by The Canadian Press was first published March 3, 2025.
Kelly Geraldine Malone, The Canadian Press
