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WASHINGTON \u2014 Finance Minister Dominic LeBlanc said Ottawa will suspend a second wave of retaliatory tariffs after U.S. President Donald Trump signed an executive order Thursday to pause some new duties on Canada and Mexico and reduce potash levies to 10 per cent.<\/p>\n
LeBlanc posted on social media that Canada will not proceed with planned retaliatory tariffs on $125 billion of U.S. products until April 2 and will continue to push the Trump administration to drop all of its latest duties.<\/p>\n
Trump\u2019s order, read out Thursday in the Oval Office, linked the tariff relief to maintaining the flow of automobile parts that comply with the Canada-U.S.-Mexico Agreement, known as CUSMA, and to helping farmers who need potash for fertilizer. It fulfilled a pledge the president made after a conversation with the Big Three automakers \u2014 Stellantis, Ford and General Motors \u2014 on Wednesday.<\/p>\n
An explanatory statement issued by the White House said there would be no tariffs on goods from Canada and Mexico that claim and qualify for CUSMA preference.<\/p>\n
Trade lawyer William Pellerin, a partner at McMillan LLP in Ottawa, said his understanding is the latest order means all goods, automotive and otherwise, which meet rules of origin requirements in CUSMA would be duty-free.<\/p>\n
However, rules of origin requirements can be complex under the trade pact.\u00a0<\/p>\n
Markets have been in turmoil since Trump followed through last Tuesday on his threat to impose a sweeping 25 per cent tariff on goods from Canada and Mexico, with a lower 10 per cent charge on Canadian energy.<\/p>\n
Ottawa responded with retaliatory tariffs on $30 billion in American goods the same day. The second wave of Canadian levies was set to take effect 21 days later.<\/p>\n
Trump said there will be \u201ca little short term interruption\u201d but he doesn\u2019t \u201cthink it will be big.\u201d<\/p>\n
\u201cThis is not a moment to celebrate,\u201d said Matthew Holmes, chief of public policy for the Canadian Chamber of Commerce. \u201cThe economy is not a toy to play with. Constant threats and economic uncertainty have taken their toll.\u201d<\/p>\n
Prime Minister Justin Trudeau warned that Canada \u201cwill continue to be in a trade war that was launched by the United States for the foreseeable future.\u201d<\/p>\n
Trudeau and Trump spoke Wednesday in a call the prime minister described as \u201ccolourful\u201d and the Wall Street Journal said was \u201cheated\u201d and \u201cincluded profanity.\u201d<\/p>\n
U.S. Commerce Secretary Howard Lutnick told business news channel CNBC earlier Thursday an agreement was likely because Canada had done an \u201cenormous\u201d amount of work on fentanyl.<\/p>\n
Ontario Premier Doug Ford said his government is still going ahead with a 25 per cent surcharge on electricity shipped to 1.5 million Americans in Minnesota, New York and Michigan starting Monday.<\/p>\n
Trump\u2019s trade war has essentially wiped out the continental trade pact, CUSMA\u2019s Canadian and Mexican architects said Wednesday. Canada\u2019s chief negotiator Steve Verheul and Mexico\u2019s chief negotiator Ken Smith Ramos said the devastating duties have technically suspended the trade agreement.<\/p>\n
\u201cWith 25 per cent tariffs, it blows a complete hole in the trade agreement,\u201d Verheul said Wednesday.<\/p>\n
\u201cIt makes it virtually worthless to us. In fact, it leaves Canada and Mexico in a far worse position than any other country in the world, practically.\u201d<\/p>\n
Trump pushed ahead with the levies using the International Economic Emergency Powers Act \u2014 a national security statute that gives him authority to control economic transactions \u2014 after declaring an emergency over fentanyl at the northern border.<\/p>\n
U.S. Customs and Border Protection data shows only a small volume of fentanyl crosses illegally into the United States from Canada.<\/p>\n
Verheul said Wednesday that using fentanyl as an excuse to impose tariffs on Canada is unjustified. \u201cAbsolutely none of this is necessary.\u201d<\/p>\n
Verheul and Ramos were key figures in the trade talks when CUSMA was negotiated under the first Trump administration to replace the North American Free Trade Agreement. Trump described it at the time as the \u201cbest agreement we\u2019ve ever made.\u201d<\/p>\n
Verheul and Ramos have partnered with global law firms and Kevin Brady, a Texas Republican and the former chairman of the House of Representatives committee on ways and means, to form the Coalition for North American Trade.<\/p>\n
The coalition\u2019s goal is to defend CUSMA as the Trump administration begins to implement a massive tariff agenda.<\/p>\n
Trump has ordered 25 per cent tariffs on all steel and aluminum imports into the United States as of March 12 \u2014 tariffs the White House has confirmed would stack on top of the other duties imposed on Canada. Trump signed an executive order to implement \u201creciprocal tariffs\u201d starting April 2.<\/p>\n
The president said Thursday those duties are still going ahead.<\/p>\n
Other potential targets for increased tariffs include automobiles, copper, lumber and agricultural products.<\/p>\n
There has been speculation the tariffs targeting Canada and Mexico are meant to rattle the countries ahead of a mandatory 2026 CUSMA review.<\/p>\n
The agreement\u2019s architects say the best-case scenario is that Canada, Mexico and the U.S. agree to tweak the agreement \u2014 though that seems unlikely, considering the current geopolitical environment.<\/p>\n
\u201cCanadians think the U.S. is no longer a reliable trading partner,\u201d Verheul said at the Washington launch of the coalition.<\/p>\n
\u00a92025 The Canadian Press<\/strong><\/p>\n<\/p><\/div>\n