President weighs in on possible 25 per cent tariffs on Canadian good as 30-day deal expires
US President Donald Trump has said he will impose 25 per cent tariffs on most Canadian goods as of Tuesday. The President cited “drugs still pouring into our country” from Canada as the reason for his decision.
The announcement follows mixed messaging from the US President last week. Last Monday he told reporters that the tariff pause would be listed because Canada was “ripping off” the US. The next day White House staff said those tariffs were still subject to negotiations. On Thursday the President made a definitive statement about tariffs linking them to drugs once again.
The tariffs, which were initially set to take effect in February, apply a 25 per cent charge to all Canadian imports with the exception of energy which has a 10 per cent tariff.
Markets fell sharply on Monday in response to the announced tariffs. The S&P 500 was down over two per cent in late-day trading with many losses accelerating after the President announced that tariffs on Canada and Mexico would take effect on Tuesday.
Bond markets also showed weakness on Monday on the back of data that signalled weakness in the US economy.
The initial pause in tariffs negotiated in early February came on the condition of Canadian investment in border security. There is some evidence that this investment has already made an impact as US Customs and Border Protection (CBP) data showed a 97 per cent reduction in fentanyl seizures coming from Canada in January.
There is still little clarity as to what President Trump expects from Canada in exchange for removing the tariff threat entirely.
