After preparing for weeks for a potential trade conflict with the US, Canada has, for the time being, avoided tariffs that Donald Trump threatened to impose on the country upon taking office.
However, Trump announced on Monday that the tariffs on Canada and Mexico might be instated by February 1st, directing federal officials to scrutinize US trade relations for unfair practices involving Canada, Mexico, and China.
The new president declared a 25% import duty on Canada and Mexico and a 10% duty on global imports, with a steeper 60% on Chinese imports.
In his inaugural speech, Trump vowed to "tariff and tax foreign countries to enrich our citizens," emphasizing his protectionist stance.
Canadian officials expressed relief at the temporary exemption but cautioned that the tariff threat remains active. Canada heavily relies on trade with its southern neighbor, with about 75% of its exports going to the US.
Foreign Minister Melanie Joly had previously warned of a potential "significant trade dispute" with the US due to the tariffs.
Canada is readying countermeasures to combat the tariffs, estimated to be in the billions of dollars.
Members of Prime Minister Justin Trudeau's cabinet are convening in Quebec for discussions on the US-Canada relationship.
Joly reiterated the importance of advocating for Canadian interests through active engagement with US counterparts, underlining the economic significance of the trade partnership between the two nations amounting to an estimated $909 billion in 2022.
"It's crucial that we remain vigilant and defend Canadian interests," stated Joly prior to Trump's announcement of considering tariffs for the following month.
The province of Alberta's leader, Danielle Smith, characterized the delay as a recognition of the complexities and repercussions involved for both American and Canadian stakeholders.
During Trump's first term, Canada, the US, and Mexico renegotiated a trilateral free trade agreement.
A presidential memorandum signed by Trump calls for an evaluation of how the deal impacts various American sectors, urging a comprehensive analysis of issues including migration and drug trafficking from Canada and Mexico.
Trump's intention to levy tariffs on Canadian and Mexican goods to address immigration and smuggling concerns has been underlined since last year.
To address security issues along the US border, Canada has committed to implementing C$1.3 billion ($900 million; £700 million) in new security measures, including enhanced surveillance and a joint task force targeting transnational organized crime.
Trump sees tariffs as pivotal to his economic strategy of bolstering the US economy, safeguarding jobs, and generating tax revenue, a perspective that has been met with concerns from economists over potential price hikes for consumers and adverse effects on businesses affected by retaliatory measures from other countries.