President Trump and Canadian Prime Minister Justin Trudeau announced a temporary deal Monday evening to halt the imposition of 25% tariffs on each other’s imports for 30 days while a final border security pact gets hashed out.
Trump, 78, and Trudeau, 53, spoke on the phone twice Monday before announcing the agreement, with Canada set to ensure 10,000 troops will be stationed at the northern border and the PM vowing to take steps to crack down on fentanyl smuggling.
“Canada has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country,” Trump announced on Truth Social, following the call with Trudeau. “Canada will implement their $1.3 Billion Border plan.”
“As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that,” he added. “I am very pleased with this initial outcome.”
In a separate post on X, Trudeau indicated that Canada would move ahead with its $1.3 billion border plan announced in December, weeks after Trump first threatened the 25% duties that were due to take effect at 12:01 a.m. Tuesday. (Canadian energy products would have been subjected to a lower 10% rate.)
That initiative, Trudeau said, includes “reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border.”
“In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada- U.S. [sic] Joint Strike Force to combat organized crime, fentanyl and money laundering. I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million.”
Earlier Monday, Trump and Mexico President Claudia Sheinbaum announced a similar monthlong pause on the looming 25% tariff against America’s southern neighbor.
Mexico confirmed plans to dispatch 10,000 troops to the US border and claimed that Washington would help crack down on illegal weapons trafficking into its territory.
Trump first threatened to slap tariffs against Canada and Mexico last November if they didn’t heed his demands to stem the flow of fentanyl and its precursor chemicals — as well as illegal immigration — into the US.
Shortly after Trump first issued the threat back in November, Trudeau jetted down to Mar-a-Lago to meet with the then-incoming president, a move that was widely panned by the outgoing PM’s domestic critics as a show of weakness.
In early January, Trudeau announced that he would step down as leader of Canada’s Liberal Party after a successor gets chosen in March. Canada is slated to have elections in October.
The 25% tariff would have been devastating for Canada, given that roughly 75% of its exports go to the US while only about 13% of American exports go to Canada.
Last year, the US imported some $377 billion worth of goods from Canada while exporting $322 billion, according to data from the US Census Bureau.
Overall, the US takes in roughly $1.4 trillion — or 40% — annually of its imports from Canada, Mexico and China, its three largest trading partners.
If all three tariffs went through, they could have cut long-term US GDP by about 0.4 percentage points, cost about 344,000 jobs and amounted to tax increases of about $1.2 trillion between 2025 and 2034, per an estimate from the Tax Foundation.
The average US household would have weathered a tax hike of about $830 in the short term, the Tax Foundation projected.
Trump himself acknowledged that the imposition of tariffs would involve “some pain” for households struggling with high prices.
“This will be the golden age of America! Will there be some pain? Yes, maybe (and maybe not!). But we will make America great again, and it will all be worth the price that must be paid,” Trump wrote on Truth Social Sunday in an all-capitalization post.
The tariff-adoring president has also been musing about issuing similar threats against European countries as well as the United Kingdom.
