U.S. President Donald Trump’s on-again, off-again threat to impose damaging tariffs on Canada are off again — at least, for the next 30 days.
Following a phone conversation Monday afternoon, Prime Minister Justin Trudeau announced that Trump is pausing the threatened 25 per cent tariffs on most Canadian goods that was set to take effect Tuesday.
Trudeau said he and Trump discussed Canada’s $1.3 billion border plan, which includes helicopter patrols, and announced $200 million in new initiatives to address fentanyl trafficking.
Alberta Premier Danielle Smith said she was “greatly heartened” to see the two sides find common ground.
“The appointment of a Canadian fentanyl czar with authority to coordinate a massive joint effort with the United Stated to target fentanyl traffickers is something Alberta has been calling for since it became clear in our discussions with U.S. elected representatives and administration officials that this would be a critical part of reaching a deal to avoid tariffs,” Smith said in a statement online Monday afternoon.
“Diplomacy has won the day. Let us ensure that continues as we know there is much more work ahead of us.”
Smith said she’ll return to Washington, D.C. next week with her fellow premiers to continue their diplomatic efforts, and will go back to D.C. later in February to attend the National Governors’ Association conference.
Trump declared victory in a post on Truth Social, saying Canada agreed to “finally end the deadly scourge of drugs like fentanyl that have been pouring into our country, killing hundreds of thousands of Americans.”
Trump said over the next 30 days, the two countries will see whether a “final economic deal” can be reached.
But his message ends with a warning that tariffs are not off the table. When speaking to reporters in the Oval Office on Monday, Trump repeated that he wants to see Canada become the 51st state.
With the reason for the tariffs seeming to change almost daily — Trump has cited everything from fentanyl and illegal border crossings to trade imbalances and more recently, American bank and business access to Canada’s finance sector — political analysts say it’s hard to pin his motivation.
“It’s difficult to know what the actual reason for the for the tariffs is,” said Mount Royal University political scientist Lori Williams.
Alberta businesses that rely on trade with America, such as those in the oil and gas industry, are cautiously optimistic about the deadline being kicked down the road.
“It shows, I think, that the U.S. relies on us and that maybe there’s a path of avoiding this altogether,” said Richard Masson, a energy expert at the University of Calgary School of Public Policy.
“But I don’t think it provides a level of certainty everybody needs to say, ‘Okay, it’s business as usual.’”
That uncertainty is a challenge for Alberta’s oil patch, which ships 95 to 97 per cent of Canada’s oil south of the border – making up about 60 per cent of U.S. crude oil imports.
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Trump had said while he was applying a 25 per cent tariff on Canadian products, energy goods like oil and gas would receive a lower 10 per cent tax.
“That does suggest that there is room for maneuvering, but the success on energy probably owes at least as much to the fact that the United States needs that energy,” Williams said, explaining Americans would see a jump at the gas pump.
“There would be direct consequences and fairly immediate consequences.”
Masson said until the tariff issue is settled for good, oil executives are going to be hesitant to make significant decisions.
“It’s going to make it harder for boardrooms to approve capital spending,” he said.
Others in Alberta say this isn’t a bullet dodged.
“I fear this is a temporary stay of execution,” said Adam Legge, president of the Business Council of Alberta, a non-partisan and non-profit think tank based in Calgary.
Experts remain concerned about tariffs stripping away at Alberta’s economic growth and how that could impact the province’s job market, Legge said.
“That could be somewhere between 60,000 and 90,000 jobs lost in Alberta, if this is prolonged,” Legge said.
For others, the tariff situation is a wake-up call to explore more manufacturing on the Canadian side of the border, as talks continue on the Prairie Economic Gateway — an industrial partnership to build an inland port in Calgary.
“If we’re trying to create that stability of having our own supply of goods, that bodes well for our entire country,” said Calgary Mayor Jyoti Gondek.
Several provinces were scrambling late Monday to reverse plans to implement non-tariff measures.
Many provinces were poised to remove products like American liquor from store shelves — some had already done so by Monday – but news of the reprieve put those retaliatory efforts on pause.
Ontario Premier Doug Ford said American alcohol products will not be removed from LCBO shelves, now that the threat has been paused for 30 days.
The premier said if the tariffs are imposed, he will not hesitate to launch retaliatory action, including prohibiting American companies from provincial procurement contracts and taking the booze back off the shelves.
The Manitoba government is also pausing plans to remove U.S. alcohol products from liquor stores and cut off American companies from provincial government contracts.
Manitoba Premier Wab Kinew says it shows that Canadians are effective when they stand up for themselves.
Quebec Premier François Legault welcomed the “good news” but laments that “uncertainty remains.” American products will also return to Quebec liquor stores shelves.
The Ontario government has also paused plans to cancel a $100 million contract with Elon Musk’s Starlink to improve rural broadband.
Edmonton’s mayor says there’s no logical reason for Trump to keep mulling tariffs. On Monday, he urged residents to keep their money in the community.
“I would encourage Edmontonians to buy local. Support local businesses,” the mayor said. “This is our opportunity to, you know, continue to show other national pride that Canada is united, that we are all going to work together and fight against these harmful tariffs.”
However, economists say that’s noble in theory — but not realistic for many Canadians amid a high cost of living.
“You just have to receive the credit card bill when you realize that, ‘Wait, I don’t know that I can afford to do this,’” said Moshe Lander, an economics professor at Concordia University in Edmonton.
“Canadians are very upset at their various levels of government for putting them in a position where they feel that their budgets just don’t satisfy their basic needs, let alone their higher level needs,” Lander said.
He noted American goods can be cheaper than local ones of the same quality, and says a boycott may not make a significant dent.
“So I think these types of boycotts, where you’re going to try and inflict economic pain — American corporations can withstand one bad quarter or two bad quarters, some lost profit.”
Lander said Canadians may not be able to weather the storm long-term, if we end up in a the same place again a month from now.
“Taking a principled stand is expensive.”
Prime Minister Justin Trudeau spoke with Trump twice on Monday, their first discussions since the president took over the White House on Jan. 20.
Trudeau released a statement on X that outlined the broad strokes of the $1.3-billion border plan his government had announced in December, adding that “nearly 10,000 front line personnel are and will be working to protect the border.”
That mirrors the number of troops Mexican President Claudia Sheinbaum pledged to send to the U.S. border on Monday morning when she announced that she had secured a deal with Trump to delay the tariffs on her country by one month.
Canada Border Services Agency already has 8,500 front-line officers, and Canada’s border is also patrolled by the RCMP between official crossings.
Mounties in Alberta have obtained a Black Hawk helicopter and it’s being used to patrol the border in the Prairie province.
Several provinces in recent weeks have assigned provincial staff and officers to assist as well.
Trudeau also said Monday that Canada will list cartels as terrorist entities.
Canada plans to launch a joint strike force with the U.S. to combat organized crime, fentanyl trafficking and money laundering, and will appoint a “fentanyl czar” — though Trudeau gave no indication of what that job would entail.
The late-day news of a pause came after markets closed after a difficult Monday. Canada’s main stock index, the S&P/TSX composite, was down nearly 300 points at the closing bell, while the loonie fell to its lowest level in more than two decades.
— With files from Sarah Ritchie, The Canadian Press
‘Stay of execution’: Albertans take in 30-day Trump tariff pause with trepidation
