Trump grants one-month extension of tariffs on certain products from Canada

President Donald Trump on Thursday signed an amendment that temporarily suspends tariffs of 25% on certain products from Mexico and Canada included in the Treaty between Mexico, the United States and Canada (T-MEC). The measure, which will be in effect until April 2, represents a shift in its trade strategy.

Impact on Canadian trade

Among the products benefiting from the extension are automobiles, which gives a respite to the Canadian automotive industry, which will now have more time to adjust its production and avoid sanctions. However, industry experts warn that one month is insufficient to move operations to the United States, due to the complexity and investment required.

Despite the easing, Canadian energy is still excluded from the T-MEC and remains at a reduced tariff of 10%. As a temporary measure, the Trump Administration also reduced the tariff on Canadian potash from 25% to 10%, partially relieving pressure on the agricultural sector.

Trump explained that the decision was made after talks with Mexican President Claudia Sheinbaum and Canadian officials. In a publication on Truth Social, he thanked Sheinbaum and highlighted bilateral cooperation on immigration and the fight against fentanyl trafficking. For her part, the Mexican president described the dialogue as "respectful" and pointed out that most of the trade with the United States is covered by the T-MEC.

However, a White House official qualified that statement, noting that only 50% of Mexican imports and 36% of Canadian imports are covered by the agreement.

Conflict with Trudeau and trade retaliation

While Trump highlighted his good relationship with Sheinbaum, his comments about Canadian Prime Minister Justin Trudeau were more critical. He accused Trudeau of politically leveraging the tariff crisis and suggested that he is using this conflict as a reelection strategy.

According to reports, a recent phone call between Trump and Trudeau regarding the tariffs grew tense and included strong words. The 50-minute conversation, described as "colorful" but "substantial," reflected the differences between the two leaders.

Trudeau confirmed that Canada will maintain its trade countermeasures as long as U.S. tariffs remain in place and stated that his government is working to mitigate damage in key sectors.

Along the same lines, Ontario Premier Doug Ford announced that the province would stop selling American liquor and impose a 25% tariff on electricity exports to states such as Minnesota, Michigan, and New York.