OTTAWA — U.S. President Donald Trump did not make good on his threat to slam Canada with punishing tariffs the day he moved back into the White House, but it's cold comfort to Canadian political leaders and business groups who say tariffs could still be on the horizon.
Trump threatened shortly after the presidential election in November to hit Canada and Mexico with steep 25 per cent across-the-board tariffs on inauguration day. He made no mention of Canada at all in his inauguration speech Monday.
In a call with reporters, an incoming White House official who insisted on anonymity pointed reporters asking about tariffs to a Wall Street Journal report that said Trump plans to sign an executive order launching an investigation into alleged unfair trade and currency practices by Canada, Mexico and China.
Tariffs weren't mentioned in a list of first priorities issued by the White House hours after Trump was sworn in, though he did touch on the notion of tariffs briefly in his speech.
"I will immediately begin the overhaul of our trade system to protect American workers and families," he said. "Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens."
He said he is establishing an "External Revenue Service" to collect tariffs and duties.
"It will be massive amounts of money pouring into our treasury coming from foreign sources," he said. "The American dream will soon be back and thriving like never before."
Trump initially tied the tariffs to concerns about immigration and illegal drugs flowing into the U.S. from Canada, but later pivoted his concerns to the trade deficit the United States has with Canada.
Quebec Premier François Legault said he believes Trump is serious about eliminating that deficit and that tariffs remain a real risk.
“I’m not saying that we won and it’s over with Mr. Trump,” he told reporters. “It may happen tomorrow morning.”
Prime Minister Justin Trudeau has said repeatedly that Canada is ready to respond with countermeasures if Trump makes good on his tariff threat. He issued a statement congratulating Trump shortly after his swearing-in, but did not refer specifically to tariffs.
"We are strongest when we work together, and I look forward to working with President Trump, his administration, members of the United States Congress, and officials at the state and local levels to deliver prosperity for our peoples — while protecting and defending the interests of Canadians,” Trudeau said in the statement.
Alberta Premier Danielle Smith — who has been offside with other premiers and the federal government over the possibility of using Canadian energy as a bargaining chip against U.S. tariffs — was in Washington, D.C. Monday for the inauguration. She said that despite "the promising news," the tariff threat is "still very real" and Canada needs to focus on diplomacy and drop any further talk of retaliatory measures.
She told The Canadian Press the apparent pause on tariffs is "a recognition that we have such an integrated economy that any move has to be done thoughtfully."
Legault said his government isn’t ruling out retaliatory measures, including export tariffs on products like hydroelectricity. He said his province will also be ready to provide aid to affected businesses, as it did for businesses during the pandemic.
Ontario Premier Doug Ford said Monday that Trump's tariff threat still needs to be taken at face value.
"He’s just adding more uncertainty, (saying) 'I may not do it today, I’ll do it tomorrow. Maybe I’ll do it in a month.' That doesn’t help," Ford told CityNews. "So we’re going to take him serious."
Goldy Hyder, president and chief executive officer of the Business Council of Canada, said Canada has received a reprieve but it's still not clear what the outcome will be of the investigation the Trump administration plans to launch.
"If it comes back and it triggers on the part of the administration the need to impose those tariffs, we still need to be ready," he said.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, said "the gloves don't drop to the ice today" but the business community remains "in high gear."
The head of Canada's largest private-sector union said she's skeptical of the reports saying Trump won't proceed with tariffs right away, given how he imposed tariffs during his first administration.
"No one should be breathing a sigh of relief at all right now," Unifor president Lana Payne said.
A new poll suggests there is limited support for Trump's threatened tariffs among Americans.
An Associated Press-NORC Center for Public Affairs Research survey found almost half of U.S. adults oppose charging tariffs on all goods brought into the U.S. from other countries — more than were in favour or were neutral on the question.
— With files from Dylan Robertson and Kelly Geraldine Malone in Washington, Morgan Lowrie in Quebec and from The Associated Press
This report by The Canadian Press was first published Jan. 20, 2025.
Kyle Duggan and Anja Karadeglija, The Canadian Press
