Tariffs on Pause, But Will It Last?
A Fragile Truce: The Uncertain Future of Canada-U.S. Relations
For now, Canadian sports fans might reconsider jeering the American national anthem. At least for the next 30 days.
The trade war is on hold—at least temporarily—but the relief is limited. Even if the next deadline passes without renewed hostilities, it remains unclear when Canadians will once again see the United States as a reliable ally and predictable partner.
The so-called resolution arrived Monday after Canadian officials agreed to additional measures addressing Donald Trump’s concerns about fentanyl crossing the northern border. These included appointing a “fentanyl czar,” designating Mexican drug cartels as terrorist organizations, and allocating $200 million to intelligence efforts on organized crime.
However, much of what Canada is now committing to was already announced weeks ago, as part of a $1.3 billion border security package revealed in December.
A Sudden Shift in Communication
On Saturday, Prime Minister Justin Trudeau admitted he had been unable to get President Trump on the phone since his inauguration on January 20. Yet on Monday, the two leaders spoke twice.
If a few calls and minor concessions were all that was needed to resolve this dispute, it begs the question: why did the U.S. push its closest ally and largest trading partner to the brink of a trade war before seeking a resolution?
Is This Really About Fentanyl?
From the start, it was difficult to see how the relatively small amount of fentanyl crossing into the U.S. from Canada could justify imposing tariffs that would harm both economies. Even Trump’s own administration sent mixed messages.
On Monday morning, Kevin Hassett, director of Trump’s National Economic Council, insisted that media coverage was misleading.
“What you need to do is go back and read the executive order where President Trump was absolutely, 100 percent clear that this is not a trade war—this is a drug war,” Hassett told CNBC. “The Canadians appear to have misunderstood the plain language of the executive order and are interpreting it as a trade war.”
If this were simply a misunderstanding, it would be an embarrassing one. But when a country threatens to impose tariffs on its trade partner—one with whom it has a free trade agreement—it is, by definition, initiating a trade war.
Moreover, Trump himself has repeatedly given Canadians reason to doubt that fentanyl was his primary concern. In a social media post on Monday morning, he complained that American banks should have more freedom to operate in Canada. Later, in the Oval Office, he exaggerated the U.S. trade deficit with Canada and casually suggested that Canada should become the 51st state.
The day before imposing tariffs, Trump stated that the U.S. was better off with higher import tariffs. He reinforced this idea in another social media post confirming the pause:
“The tariffs will be paused for a 30-day period to see whether or not a final Economic deal with Canada can be structured.”
A “final Economic deal” suggests concerns extending well beyond border security—despite Canada and the U.S. having already signed a free trade agreement in 2018.
A Nation on Edge
For now, American products are returning to Canadian store shelves, U.S. drivers won’t face extra tolls on Nova Scotia’s Cobequid Pass, and the North American automotive industry can breathe a sigh of relief.
But Canadians—businesses, policymakers, and citizens alike—are now eyeing March 4, the deadline for this temporary truce. Will new demands emerge before then?
Perhaps Canada’s enhanced border security measures will be enough to placate Trump. Maybe the market’s reaction on Monday forced him to reconsider his approach. But even if tensions ease, how long can Canadians trust in this newfound stability?
The past 72 hours have sparked a wave of patriotism and nationalism that may not fade quickly. Canada’s growing inclination to reduce reliance on the U.S. and prioritize homegrown products might not be a passing trend, but rather a signal of the country’s future direction.
