In a surprising twist that has left both Canadians and Americans reeling, President Donald Trump has retreated on his longstanding threat to impose devastating tariffs on Canadian imports, despite previously touting such measures as essential to American economic interests.
On Monday, Canadian Prime Minister Justin Trudeau announced that the United States had agreed to pause the looming tariffs for “at least 30 days,” following a flurry of diplomatic talks, including two phone calls with Trump.
Trump announced a deal to delay tariffs by a month after Mexico President Claudia Sheinbaum agreed to place 10,000 soldiers at the border.
That sent stocks on the verge of a comeback after they initially tumbled Monday. The Dow ended the day down by around 122 points, or 0.27%, after tumbling nearly 600 points at the opening bell. The S&P 500 lost 0.76% and the Nasdaq Composite was 1.2% lower.
This temporary reprieve has done little to quell the growing resentment and fear that these trade penalties could be revived at any moment.
While the delay might offer a temporary sense of relief, it underscores the volatile and unpredictable nature of Trump’s leadership—and the economic uncertainty that Canadians must now contend with.
The tariffs, which were set to hit Tuesday, would have imposed a 25% tax on a range of Canadian imports and a 10% levy on energy products, with potentially disastrous effects on jobs, businesses, and everyday consumers in both countries.
Trump has long targeted Canada over what he deems “unfair” trade practices and a trade deficit that he claims benefits Canada at America’s expense. He has specifically attacked Canada’s energy sector and, more recently, accused the Canadian government of not doing enough to address the fentanyl crisis and illegal migration.
But despite Trump’s rhetoric, Canada’s retaliatory tariffs, which were set to impose a $106 billion burden on US goods, have now been delayed—a move that many see as a desperate attempt to avoid further diplomatic and economic fallout.
Trudeau’s announcement that he would appoint a “Fentanyl Czar” and implement stricter border control measures does little to appease the growing discontent within Canada, where citizens and workers are expressing anger over Trump’s tactics.
The announcement of Trump’s retreat does not come without a heavy cost.
For many Canadians, the mere threat of tariffs has fueled an existential crisis in the US-Canada relationship. With Trump wielding economic power like a blunt instrument, Canadians are growing increasingly frustrated by the instability and uncertainty that has taken hold in their economy.
Lana Payne, national coordinator of Unifor, Canada’s largest private-sector union, summed up the frustration that many Canadians feel: “It’s very, very worrisome right now for workers. A lot of concern, a lot of worry, a lot of uncertainty—they’re feeling all of it.” She also added that the anger comes from the fact that “the United States would do this to the Canadian economy, would do this to Canadian workers, considering our long history of working together.”
In the lead-up to his incitement of a confrontation between the U.S. and China in 2018, 1,100 economists signed a letter of warning to the U.S. president.
“My message to the president is he better be very careful,” said Robert Engle, a Nobel-winning economist and professor at NYU. “We’ve had 88 years of reductions in tariffs and to suddenly increase them again against our allies and trade representatives, it seems like madness.”
The letter to Trump quoted entire passages of another, similar warning penned by economists 88 years earlier when economists were worried about the Smoot-Hawley Act.
The Smoot-Hawley Act raised US tariffs on over 20,000 imported goods after it was signed by President Herbert Hoover on June 17, 1930.
That law has become a token for bad policy as it made it more expensive for foreign countries to sell goods to the United States, which led to a decline in global trade and added strain to the Great Depression.
The White House confirmed the deal with Canada and Mexico that allows for a period of negotiations about drug smuggling and illegal immigration.
There is a risk that the tariffs could still come into effect, leaving the global economy uncertain about whether a crisis has been averted or if a possible catastrophe could still be coming in the weeks ahead.
A Cross-Border Relationship at Risk
The bond between the US and Canada is one of the longest-standing trade relationships in the world, with the US being Canada’s largest trading partner.
The tariffs proposed by Trump threatened to undo years of cooperation between the two nations, with Canada exporting billions of dollar’s worth of goods and energy to its southern neighbor every year.
While Trump’s sudden retreat on the tariffs might be seen as a temporary victory, the damage has already been done.
The fact that their economy is still vulnerable to Trump’s whims is deeply troubling for many Canadians, who have begun calling for a shift in focus toward diversifying their trade relationships beyond the US.
“I think it’s time we rethink our dependence on the United States,” said Charlie Angus, a lawmaker from the New Democratic Party. “We have to consider a future where we are not held hostage to the political whims of a man who uses tariffs like a wrecking ball.”
While Trump’s withdrawal of the tariff threat might have momentarily calmed the storm, the real consequences of his actions may still loom large. Canadians—particularly those living in poverty—are already feeling the pinch from rising prices, inflation, and job insecurity.
And the worst part? They know they are at the mercy of a leader whose economic decisions can change at any moment, as if dictated by the latest whims of the White House.
An expert in Canada-US relations, put it bluntly: “We are really subject to the whims of a guy in the White House, and that’s a very scary thing.”
For the average Canadian, the uncertainty is maddening. The looming trade war has left many with no idea what will happen next, creating confusion and panic as businesses brace for a future of tariffs and retaliation. Canadian shoppers are already questioning the prices of goods and looking for ways to cut back on US imports, all while waiting for the next shoe to drop.
As Trump’s trade policies continue to play havoc with Canada, Mexico, and beyond, one thing is clear: his use of tariffs is not just a bargaining chip—it’s a tool to reshape the global economic order to his advantage. The threats made against Canada, if carried through, would have been a disaster for both sides, and yet Trump’s decision to delay the tariffs raises more questions than answers.
Canada, once a trusted ally, now stands at the mercy of Trump’s ever-shifting political goals. And while this latest retreat may offer a temporary reprieve, it also highlights the volatility of US trade policy under the current administration. With tensions still simmering, the future of North American trade remains uncertain, leaving many to wonder: what will Trump do next?