Canadian Leaders Remain Cautious as Trump Signals No Immediate Tariffs

As U.S. President Donald Trump begins his second term, Canadian leaders are expressing cautious optimism after reports indicated he will not impose tariffs on Canada immediately. However, concerns linger that tariffs could be just around the corner.

Liberal MP John McKay, co-chair of the Canada-United States inter-parliamentary group, stated, "Everything is to be determined, and it will be 'to be determined' for the next four years." His sentiments reflect a widespread apprehension among Canadian politicians and business groups about the prospect of future tariffs.

Trade Minister Mary Ng emphasized that Canada must remain vigilant, saying, "We need to be prepared should there be tariffs, and Canada, I would say, is ready." This comments come in light of Trump's previous threats to impose a sweeping 25% tariff across the board on Canadian imports if he deemed it necessary.

Quebec Premier François Legault expressed his belief that Trump is intent on addressing the U.S. trade deficit with Canada, warning, "I'm not saying that we won and it's over with Mr. Trump; it may happen tomorrow morning." During his first term, Trump had previously indicated intentions to investigate trade practices of Canada, Mexico, and China, further fueling Canadian fears of potential tariffs.

Despite Trump’s initial threats, there was no mention of imposing tariffs in the White House’s list of first priorities upon his swearing in. Canadian Prime Minister Justin Trudeau took the opportunity to congratulate Trump but remained noncommittal on the tariff issue, stating, “We are strongest when we work together...”

As the Trudeau administration prepares itself, sources close to the federal government reveal that Ottawa is closely monitoring Trump's actions before disclosing any counter-tariff strategies. In a proactive measure, the government plans to invest $1.3 billion into border security to dissuade tariff implementation, initially tied to concerns over border safety but later reframe as a matter of trade balance.

In a significant meeting last week, Trudeau convened with the country’s 13 premiers to devise a united response against potential tariffs. Alberta Premier Danielle Smith, however, expressed reservations regarding retaliatory measures that could impact the province's oil and gas sector, highlighting the need for a diplomatic approach to avoid escalating tensions.

Legault hinted at possible export tariffs on key products such as hydroelectricity should the need arise, while also preparing to support businesses that may be adversely affected, similar to measures taken during the pandemic.

Ontario Premier Doug Ford underscored the need to take Trump's tariff threats seriously, emphasizing the ongoing uncertainty around his intentions. "He’s just adding more uncertainty. We’re going to take him seriously," Ford stated.

On the business front, leaders such as Goldy Hyder from the Business Council of Canada and Candace Laing from the Canadian Chamber of Commerce echoed the need for readiness. Laing commented that the business community remains on high alert, even while feeling a temporary reprieve.

An Associated Press-NORC poll reveals prevailing skepticism amongst the American public regarding tariffs. Almost half of U.S. adults oppose charging tariffs on imports, suggesting that any move by Trump may be met with resistance even within his own country.

As Canada braces for the unpredictable possibilities of trade relations and tariffs, vigilance remains essential. With Trump at the helm, the landscape is fraught with uncertainty, leaving Canadian leaders to navigate this potential minefield while focusing on protecting their nation's economic interests.