Despite tariff pause, uncertainty hangs over Canadian economy

OTTAWA – Canada’s economy remains uncertain despite a 30-day pause in tariffs that were set to take effect today.

The temporary reprieve has averted — at least for now — a continental trade war that economists on both sides of the border had warned would send prices soaring.

U.S. President Donald Trump’s decision prompted Canada and its provinces to halt their own retaliatory measures, including tariffs and a ban on the sale of American alcohol north of the border.

Trump signed an executive order on Saturday that would impose a 25 percent tariff on all imports from Mexico and Canada and a 10 percent tariff on Canadian energy imports.

But on Monday, after two phone calls with Canadian Prime Minister Justin Trudeau, Trump announced that the tariffs would be suspended for 30 days so the two countries could reach a “final economic agreement.”

Trudeau also outlined his government’s $1.3 billion plan to address Trump’s concerns about border security, announced in December, in a media post.

He also announced that nearly 10,000 frontline troops will be guarding Canada’s borders “now and in the future” and announced $200 million in new measures to combat fentanyl trafficking, including the appointment of a “special fentanyl officer.”

Some of these border measures are set to be unveiled today.

Public Safety Minister David McGuinty and Prairie Regional Economic Development Minister Terry Duguid will be at the Emerson border crossing this morning, along with Manitoba Premier Wab Kinnow, to learn about the Canada Border Services Agency’s methods for detecting fentanyl and other toxic substances. They will also tour a Black Hawk helicopter recently used by the Royal Canadian Mounted Police on border patrols.

However, the temporary tariff freeze does not provide long-term reassurance for many Canadian workers and businesses.

Unifor, the country’s largest private sector union, has warned that the threat of Trump’s tariffs remains and is putting Canadian jobs at risk. Lana Payne, the union’s national president, stressed that Canada must “use all the tools we have to build a strong, resilient and diversified economy.”

The Business Council of Canada also said that “with this 30-day freeze, there is still a lot of uncertainty.”

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