OTTAWA — “For now.”
In two words muttered to reporters as he walked away from an impromptu scrum Monday, Prime Minister Justin Trudeau summarized the Canadian political class’s reaction to reports President Donald Trump would not be imposing 25-per-cent tariffs on Canadian goods immediately.
But politicians and observers say Canada is far from out of the woods and that the prospect of a tariff war with the country’s biggest trade partner is still very real.
On Monday morning, before Trump was sworn-in at noon, U.S. media reported that the much-feared 25 per cent tariffs on Canadian and Mexican goods that Trump had threatened in November were not expected on day one of his presidency.
Tariffs weren’t mentioned in a list of first priorities issued by the White House hours after Trump was sworn in.
Instead, the Wall Street Journal reported that Trump directed U.S. agencies to investigate American trade deficits with other countries and the currency policies of foreign nations.
Speaking to reporters at the start of a cabinet retreat in Montebello, Que., Foreign Minister Mélanie Joly said Canada was still working to prevent the tariffs as well as to diversify its trade partners. She also noted that the study Trump ordered was news to her.
She was flanked by Finance Minister Dominic LeBlanc and Public Safety Minister David McGuinty, who said they were still wary of the tariff threat.
“Reprieve is a big word,” LeBlanc said. “For the moment, the plans of the (Trump) administration are not fully known.”
If Trump does impose new tariffs on Canada, the federal government has threatened to match U.S. tariffs dollar-for-dollar in the eventuality of a new trade war.
Monday, Ontario Premier Doug Ford announced he had ordered the province’s liquor board to remove all U.S. products from its shelves if Trump makes good on his promise of 25 per cent tariffs, something he said Kentucky Gov. Andry Beshear begged him not to do.
“First thing out of his mouth was, ‘Don’t touch my bourbon’,” Ford said. “So I said, ‘You know, Governor, you’ve got to talk to your President because the first thing we’re doing, we’re getting your bourbon’.”
In an interview, former senior Trudeau adviser Marci Surkes said Trump is “impossible to read,” so an absence of an executive order imposing tariffs on Canada on Monday does not mean Ottawa can breathe easy.
“I’m sure today there is a slight sense of relief and some cautious, but very cautious, optimism,” said Surkes, now chief strategy officer at Compass Rose.
“There is not a single member of the cabinet at that retreat today in Montebello who feels they are entirely off the hook. Quite the contrary, I think they are seeing this as a momentary reprieve and an opportunity to double down and keep engaging.”
Sen. Peter Boehm, who was the sherpa of the 2018 G7 in Canada during the previous Trump administration, said there is still a strong chance the U.S. puts in place its “incredibly stupid” 25 per cent tariffs because Trump’s negotiating strategy is generally to try to bully other parties into submission. He pointed to the fact that the Canada-U.S.-Mexico Agreement (CUSMA) is scheduled for review in 2026.
“If the U.S. administration is to do a study on how they can increase tariffs and whatnot, why not roll that into the (CUSMA) review, which is likely to be a renegotiation, unless they decide to abrogate it completely,” he noted.
Quebec Premier Francois Legault also insisted that Canada had avoided U.S. tariffs “today” and said his government is still working on its own reply to a potential trade war.
“What we are analyzing with the economy team is sector by sector, product by product, what are the best measures to put in place. If Mr. Trump were to implement import tariffs, we could also put import tariffs, but also export tariffs on our energy sector. The idea is to protect Quebecers, protect Canadians,” he said.
Quebec’s Minister of International Relations Martine Biron, who was in the U.S. for Trump’ inauguration, said a Trump presidency is a “marathon” that is full of surprises and that tariffs still aren’t off the table.
“I think that in situations like this, you have to wait and see the facts. So, let’s wait and see,” Biron told Quebec-based news outlet Noovo Info. “Trump has to sign hundreds of executive orders, so it can take awhile.”
“Our expectations are constancy and surprise. Constancy because we expect protectionist measures” as well as additional border security, Biron continued. “Surprise because it’s President Trump. We have the 2016 to 2020 experience. We know he’s unpredictable and nothing suggests this time will be different.”
National Post, with additional reporting by Catherine Levesque and Antoine Trepanier
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