Tariff turmoil: Premiers halt retaliation as Trump, Trudeau agree on one-month delay
U.S. President Donald Trump has imposed unprecedented 25-per-cent tariffs on Canadian products, and 10-per-cent levies on Canadian energy, which will take effect on Tuesday.Evan Vucci/The Associated Press
7:44 p.m. ET
Alberta Premier Danielle Smith lauds pause
– Carrie Tait
Alberta Premier Danielle Smith, who broke from her counterparts across the country by eschewing retaliatory measures, said on social media she is “greatly heartened” Canada and the U.S. reached a deal to “crack down on Fentanyl trafficking and other illegal activities at our shared border.”
Ms. Smith said Alberta had been calling for a “Canadian fentanyl czar” since U.S. representatives and officials in the Trump administration made it clear to her government “that this would be a critical part of reaching a deal to avoid tariffs.” On social media earlier in the day and at a press conference last week, Ms. Smith urged the federal government to appoint a “border czar,” suggesting a general should take the helm.
“Diplomacy has won the day,” Ms. Smith wrote on X. “… I once again call on our federal government officials and fellow Premiers to de-escalate rhetoric, abandon any non-tariff measures for the time being, and turn our efforts entirely to advocacy and good faith negotiation.”
She said she will travel to Washington next week with other premiers to further press Canada’s case. Ms. Smith said she will also attend the National Governors Association later this month.
In an op-ed published Sunday, Ms. Smith said diplomacy by her government and industry was “a primary reason” Mr. Trump planned to impose a 10 per cent tariff, rather than 25 per cent, on Canadian energy.
7:32 p.m. ET
What could get expensive if tariffs do hit Canada
– Mariya Postelnyak
This Esso station at Mt Pleasant Rd and Merton St. in midtown Toronto shows regular gas priced at 151.9 cents per litre on Feb 3, 2025.Fred Lum/The Globe and Mail
The cost of lettuce and other perishable foods, and gasoline prices in some provinces, would be the first costs to spike for Canadian consumers if and when U.S. President Donald Trump slaps a 25-per-cent tariff on imports from Canada, and if Ottawa and the provinces retaliate.
On Monday, Prime Minister Justin Trudeau announced a 30-day pause on the implementation of new U.S. tariffs and Canadian countertariffs on American goods, which were scheduled to begin Tuesday. By some estimates, if tariffs proceed, the price of gasoline could increase by as much as 10 per cent in some provinces and Canadian auto buyers might pay in excess of $8,000 more for a new car within weeks.
Read more: If tariffs do come for Canada, here’s what would get expensive first
7:22 p.m. ET
Quebec will put U.S. alcohol back on shelves but wants out of Starlink contract, Legault says
– Frédérik-Xavier D. Plante
Quebec Premier Francois Legault speaks to the media during a press conference in Montreal on Monday.Christinne Muschi/The Canadian Press
Quebec Premier François Legault said U.S. products would be put back on the shelves of the SAQ, the provincial liquor store chain, following the postponement of U.S. tariffs on Canadian products.
At a news conference in Montreal, Mr. Legault said the respite is good news, but the continuing uncertainty is bad for business. The Premier called for an early renegotiation of the free trade agreement between Canada, the U.S. and Mexico, which is due in 2026, to end the uncertainty and avoid more tariff threats.
Mr. Legault declined to comment on previously announced penalties for U.S. companies bidding on Quebec government contracts. He said, however, that Quebec is reviewing a contract with Elon Musk’s Starlink satellite internet provider. “We would like to get out of this contract,” Mr. Legault said.
7:11 p.m. ET
In Kentucky bourbon country, the prospect of a trade war feels like a hangover that won’t go away
Threatened tariffs have been paused for 30 days, but Kentucky bourbon producers again find themselves in the crosshairs as a target for retaliation as President Donald Trump considers new import taxes on Canada and Mexico.
The Associated Press
6:13 p.m. ET
Manitoba, Nova Scotia and New Brunswick pause removal of U.S. alcohol, premiers say
A sign notifying customers that a Winnipeg store will stop selling U.S. liquor is displayed before Premier Wab Kinew said he would pause the plan due to the hold on U.S. tariffs reached by Trump and Trudeau.Ed White/Reuters
– Temur Durrani and Lindsay Jones
Manitoba Premier Wab Kinew says his government is pausing its removal of American alcohol from liquor stores in the province after U.S. President Donald Trump announced a 30-day reprieve on tariffs for Canada.
Mr. Kinew told reporters late Monday that the pause is temporary, reacting to the news he had just seen on social media at the tail end of an unrelated event in Winnipeg.
He declined to say whether or not his retaliatory measure targeting American alcohol, which was implemented Sunday, would be back on the table should U.S. tariffs proceed after Mr. Trump’s 30-day delay.
Nova Scotia Premier Tim Houston says he, too, is standing down on retaliatory measures, expressing relief about the tariff pause.
“For now, we can all take a breath,” he wrote in a statement posted on social media.
He expressed how difficult it’s been for Canadians these past several days to watch in “real-time as President Trump’s desired goals continued to shift.”
But he noted that the strength of Canada’s long-time friendship with the United States will ultimately prevail. “It has survived wars, recessions, and pandemics – I believe it can also ultimately survive President Trump.”
New Brunswick Premier Susan Holt says she is happy to hear about the tariff pause and hopes Canada and the United States can continue to make progress over the coming weeks.
“We remain ready with our tariff response plan,” she said, adding that American alcoholic beverages will remain on Alcool NB Liquor shelves. However, the province will not be purchasing new product for the time being.
5:27 p.m. ET
Ontario pauses retaliation plans to scrap Starlink deal and remove U.S. alcohol from shelves
– Jeff Gray
Ontario Premier Doug Ford is pausing plans to scrap a $100-millon deal with Elon Musk’s Starlink satellite internet service provider and throw U.S. alcohol off Ontario’s liquor-store shelves after Mr. Trump offered a last-minute reprieve from economically damaging tariffs.
The relaxing of tensions came just hours after Mr. Ford said at a Monday campaign event that he would cancel the province’s deal with Starlink, the company owned by the billionaire Trump acolyte, and ban U.S firms from bidding on Ontario government contracts. Mr. Ford and other premiers had also announced plans to block sales of U.S. alcohol.
“With the U.S. pausing tariffs, Ontario will also pause our retaliatory measures,” Mr. Ford said in a statement. “If President Trump proceeds with tariffs, we won’t hesitate to remove American products off LCBO shelves or ban American companies from provincial procurement.”
5:10 p.m.
Bay Street and Wall Street closed lower
– Reuters, Globe staff
The major stock indexes on both Wall Street and Bay Street closed lower on Monday, but partly recovered from initial steeper losses as U.S. President Donald Trump delayed tariffs on Mexico after his orders to levy tariffs on three countries sparked a global scramble to safe-haven assets earlier in the day.
According to preliminary data, the S&P 500 lost 45.45 points, or 0.75%, to end at 5,995.01 points, while the Nasdaq Composite lost 235.21 points, or 1.20%, to 19,392.23. The Dow Jones Industrial Average fell 124.47 points, or 0.27%, to 44,420.19.
The 11 major S&P sectors were mixed, with defensive ones such as healthcare and consumer staples leading gains while information technology and consumer discretionary lost the most ground.
Legacy automakers like Ford and General Motors – which have been roiled by the impending tariffs – recouped some of their losses.
The loonie edged higher Monday.
5:03 p.m.
Trump ‘very pleased’ with agreement
Donald Trump said he was “very pleased” with the agreement struck with Justin Trudeau to pause tariffs in exchange for new Canadian spending on border security and narcotics intelligence.
“The Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured,” Mr. Trump wrote on Truth Social.
He reposted the text of a social media post from Mr. Trudeau, who outlined the commitments Canada made to the U.S.
Mr. Trump wrote: “Canada has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of Americans, while destroying their families and communities all across our Country.”
4:44 p.m.
Canada to appoint ‘fentanyl czar’ and spend $1.3 billion on border security
Justin Trudeau said “nearly 10,000 frontline personnel are and will be working on protecting the border.”
In his afternoon call with Donald Trump, the Prime Minister says the two leaders talked about Canada implementing $1.3-billion over six years in new border security investments, reinforcing surveillance with new helicopters, technology and staff.
“In addition, Canada is making new commitments to appoint a fentanyl czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.”
Mr. Trudeau said he has agreed to spend $200-million more on fighting fentanyl and organized crime and has signed a new intelligence directive to this effect.
4:35 p.m.
U.S. tariffs on Canadian goods paused
U.S. President Donald Trump welcomes the NHL 2024 Stanley Cup Champions Florida Panthers to the White House on February 3, 2025, in Washington, DC.JIM WATSON/AFP/Getty Images
Prime Minister Justin Trudeau says U.S. President Donald Trump has agreed to pause tariffs for 30 days after a Monday afternoon call.
He said Canada has agreed to appoint a “fentanyl czar” as part the agreement.
“Proposed tariffs will be paused for at least 30 days while we work together.”
The second call between Donald Trump and Justin Trudeau “went very good,” Mr. Trump said Monday afternoon.
Before Mr. Trudeau’s statement, there was not yet word on whether the two sides had come to an agreement that would result in the U.S. pausing the imposition of 25-per-cent tariffs starting Tuesday.
“Watch,” Mr. Trump said as he walked to the Oval Office with members of the Stanley Cup-winning Florida Panthers.
Earlier in the day, Mr. Trump paused 25-per-cent tariffs on Mexico after Mexican President Claudia Sheinbaum promised to deploy 10,000 Mexican soldiers to the border to stop the flow of fentanyl and illegal migrants into the U.S.
4:19 p.m.
Canadian celebrities wade into ‘tariff madness’ with patriotic jokes on social media
– Moira Wyton
Canada has exported plenty of talent to the United States over the years, and some of those celebrities are weighing in on the rift between their home and adoptive countries.
Captain Kirk himself, William Shatner, joked about needing to charge a tariff on his social media posts since he’s a product of Canada in a post on X Monday. The 93-year-old actor, best known for Star Trek, was born in Montreal and is a long-time U.S. resident and green-card holder.
Meanwhile, others such as Hollywood star Simu Liu were more forthcoming in what they thought of the United States’ tariffs. The Mississauga-raised actor, who rose to fame on CBC’s Kim’s Convenience before landing the Marvel superhero role of Shang-Chi, remarked on the national unity among Canadians “taking on these dumbass tariffs” in an X post on Monday.
Back in Canada, beloved children’s singer Raffi posted a photo of his local grocery store’s yogurt section and said buying Canadian products is just “how we roll against tariff madness.”
3:22 p.m.
J.D. Vance: ‘Spare me the sob story’
Canada and the U.S. may be centuries-old allies – but that matters little to the new occupants of the White House.
“Spare me the sob story about how Canada is our ‘best friend,’” Vice-President JD Vance wrote this weekend on X.
“I love Canada and have many Canadian friends. But is the government meeting their NATO target for military spending? Are they stopping the flow of drugs into our country?” he wrote.
“I’m sick of being taken advantage of.”
President Donald Trump has taken a similar tone, saying Monday from the Oval Office that has little time for past loyalties.
“A lot of these countries that we’re talking about – you know, there are so called allies. But they don’t treat us well,” he said.
3:04 p.m. ET
B.C. critical minerals being diverted away from United States: David Eby
– The Canadian Press
British Columbia Premier David Eby says major companies in the province are in the process of redirecting critical minerals and energy products to markets outside the United States in response to American tariffs.
Mr. Eby says leaders of major mining and refining companies in B.C. have indicated they are redirecting products such as aluminum and copper to alternative markets.
Mr. Eby told a news conference in North Vancouver that a “historic reordering” of global trading patterns is under way, and B.C. will not be left out.
The premier says the shift presents an opportunity for the province to “build allyship and partnership” with others Mr. Trump is targeting or threatening with steep tariffs, including Mexico, the European Union and the United Kingdom.
“We’re going to make sure that we have other deep relationships, trading relationships, so that our families are safe. We’re transforming our economy to ensure independence and our sovereignty as a province and as a country.”
2:32 p.m. ET
Loonie falls, S&P/TSX composite down more than 250 points
After a volatile weekend with 25% tariffs levied (10% on oil and gas) on all Canadian products going into the United States, the S&P TSX Composite Index shows market reaction on Feb 3, 2025. (Fred Lum/The Globe and Mail)Fred Lum/The Globe and Mail
– The Canadian Press
Canada’s main stock index was down more than 250 points in afternoon trading.
The S&P/TSX composite index was down 265.90 points at 25,267.20 by the afternoon after sliding more than 700 points earlier in the day.
Meanwhile, stock markets in the U.S. were off their lows of the day after U.S. President Donald Trump and Mexican President Claudia Sheinbaum put their planned tariffs on hold Monday for a month to give time for further negotiations.
In New York, the Dow Jones industrial average was down 76.16 points at 44,468.50. The S&P 500 index was down 40.23 points at 6,000.30, while the Nasdaq composite was down 210.38 points at 19,417.06.
2:28 p.m. ET
Here’s how tariffs could hit Canada in unexpected ways
The economic effects of tariffs for a trade-dependent country such as Canada are well-known. Significant and widespread duties would harm economic growth while driving up costs for both businesses and consumers.
But tariffs also promise to hit Canadians in unexpected ways, raising the price of even locally made or locally grown products, squeezing cash flow for smaller businesses and, in some cases, sending Canadian suppliers scrambling to pay the U.S. government for levies that usually apply to American importers.
“Every time physical goods cross the border, there’s always the risk that they will attract tariffs,” Joy Nott, partner for trade and customs at consultancy KPMG Canada, told The Globe and Mail, speaking before the U.S. and Canada’s tariff announcements.
How tariffs could pile up:
The journey of a crankshaft
A crankshaft, the metal backbone of a combustion engine, might travel between Canada and the U.S. six times as it moves along the North American supply chain. At each of those border crossings, a U.S. tariff or Canadian counter tariff could add a layer of tax. While businesses would pay the levies, much of the added cost from trade tariffs often trickles down to consumers.
Hit by Canadian
counter-tariffs
Hit by U.S. tariffs
The metal casting happens in Mexico
The crankshaft travels to Canada where it is re-finished
It then travels to the U.S. to be further finished
In Canada it’s incorporated in a truck’s engine
Then it travels to a truck assembly plant in the U.S.
In Canada it is painted and the trims are added
Then it goes back to the U.S. to be sold to consumer
MURAT YÜKSELIR /
THE GLOBE AND MAIL, SOURCE: APMA
How tariffs could pile up:
The journey of a crankshaft
A crankshaft, the metal backbone of a combustion engine, might travel between Canada and the U.S. six times as it moves along the North American supply chain. At each of those border crossings, a U.S. tariff or Canadian counter tariff could add a layer of tax. While businesses would pay the levies, much of the added cost from trade tariffs often trickles down to consumers.
Hit by Canadian counter-tariffs
Hit by U.S. tariffs
The metal casting happens in Mexico
The crankshaft travels to Canada where it is re-finished
It then travels to the U.S. to be further finished
In Canada it’s incorporated in a truck’s engine
Then it travels to a truck assembly plant in the U.S.
In Canada it is painted and the trims are added
Then it goes back to the U.S. to be sold to consumer
MURAT YÜKSELIR /
THE GLOBE AND MAIL,
SOURCE: APMA
How tariffs could pile up: The journey of a crankshaft
A crankshaft, the metal backbone of a combustion engine, might travel between Canada and the U.S. six times as it moves along the North American supply chain. At each of those border crossings, a U.S. tariff or Canadian counter tariff could add a layer of tax. While businesses would pay the levies, much of the added cost from trade tariffs often trickles down to consumers.
Hit by U.S. tariffs
Hit by Canadian counter-tariffs
In Canada it’s incorporated in a truck’s engine
The crankshaft travels to Canada where it is re-finished
In Canada it is painted and the trims are added
Then it goes back to the U.S. to be sold to consumer
Then it travels to a truck assembly plant in the U.S.
The metal casting happens in Mexico
It then travels to the U.S. to be further finished
MURAT YÜKSELIR /
THE GLOBE AND MAIL,
SOURCE: APMA
Read more here: Here’s how tariffs are calculated and collected
2:21 p.m. ET
Canada’s auto sector hoping for similar tariff reprieve as Mexico
Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, says the auto sector will likely shut down in a week or so if the 25-per-cent tariffs go into force on Tuesday.Cole Burston/The Canadian Press
– The Canadian Press
Canada’s auto sector is hoping for the tariff reprieve Mexico has secured as it faces a potential shutdown from the added border tax.
Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, says he’s hoping Prime Minister Justin Trudeau can secure a delay on tariffs during a call with U.S. President Donald Trump scheduled for this afternoon.
He says the auto sector will likely shut down in a week or so if the 25-per-cent tariffs go into force on Tuesday as Mr. Trump has ordered.
Sam Fiorani, an automotive expert at AutoForecast Solutions LLC, says automakers have had little time to stock up on inventory in the days since Mr. Trump confirmed the tariffs.
He says automakers Honda and Toyota would be especially affected as they sell some of their most popular SUVs into the U.S. market from their Canadian operations, while parts suppliers would also be seriously hit.
2:10 p.m. ET
Trump reiterates remarks on wanting Canada to become the ‘51st state’
President Donald Trump speaks as he signs executive orders in the Oval Office of the White House in Washington.Evan Vucci/The Associated Press
Donald Trump would “like to see Canada become our 51st state,” he said again Monday, in some of his most extensive remarks to date describing his desire for the U.S. to take ownership of its northern neighbour.
The U.S. President suggested that his country could annex Canada so long as American people are willing to endure some inconvenience.
”If people wanted to play the game right, it would be 100 per cent certain that they’d become a state,” he said. “But a lot of people don’t like to play the game, because they don’t have a threshold of pain. And there would be some pain. But not a lot. The pain would be really theirs.”
Mr. Trump said again that he does not believe his country has any reason to rely on goods from Canada, including lumber or cars.
For Canada to become a state, however, “it’s much different,” he said. “And there are no tariffs. So I’d love to see that.”
1:53 p.m. ET
Trump describes ‘pretty good call’ with Trudeau, but makes no commitment to pausing tariffs
U.S. President Donald Trump and Prime Minister Justin Trudeau are scheduled for another call at 3 p.m. ET to discuss tariffs.SERGEI GAPONROBERTO SCHMIDT/AFP/Getty Images
Donald Trump described his Monday morning conversation with Justin Trudeau as “a pretty good call,” but made no commitment to pausing tariffs on Canada, as he has on Mexico.
Mr. Trump, in remarks from the Oval Office, reiterated his desire to see new access to Canadian markets for American banks and dairy producers.
“We don’t need them to make our cars. We don’t need them to give us lumber. We don’t need them for agricultural products,” Mr. Trump said.
He is expected to speak again with Mr. Trudeau at 3 p.m.
“Canada is very tough. They’ve very, very tough to do business with. And we can’t let them take advantage of the U.S.,” he said.
1:45 p.m. ET
Are you saying ‘bye America’ and buying Canadian instead? The Globe wants to know
A sign is placed in front of the American whiskey section at a B.C. liquor store after top selling American made products have been removed from shelves in Vancouver, B.C., Feb. 2.ETHAN CAIRNS/The Canadian Press
– Globe Staff
The impacts of U.S. tariffs could be devastating on Canadian businesses and the economy. In response, a movement has surged to boycott American goods and buy Canadian products instead.
The Globe wants to know if your habits are changing in the face of U.S. tariffs. What products will you be substituting with a Canadian version? Are there any local brands you absolutely love? We’d love to hear about groceries, clothing, toys, home products and more – or even a general philosophy you employ when shopping in stores.
Please fill out the form below or send an email to audience@globeandmail.com to share your thoughts.
Are you changing your buying habits in the face of tariffs?
The impacts of U.S. tariffs could be devastating on Canadian businesses and the economy.
In response, a movement has surged to boycott American goods and buy Canadian products instead. The Globe wants to know if your habits are changing in the face of U.S. tariffs. What products will you be substituting with a Canadian version? Are there any local brands you absolutely love? What type of products do they sell? We’d love to hear about groceries, clothing, toys, home products and more.
Please fill out the form below or send an email to audience@globeandmail.com to share your thoughts.
1:39 p.m. ET
Canada’s allies voice concern about Trump’s tariffs
Canada’s allies are speaking out in support of this country as it faces 25-per-cent tariffs on exports to the U.S.
The German embassy in Canada said in a statement Monday that Berlin “is concerned about the announcement by the United States to impose tariffs on Canada and others.”
The embassy referred to comments by German Chancellor Olaf Scholz Sunday, who said: “We must not divide the world through multiple tariff barriers, but ensure that we enable this trade in goods and services also in the future.”
“Let’s be clear: Tariffs would harm everyone,” the embassy said.
1:34 p.m. ET
Poilievre calls for soldiers to be sent to the Canada-U.S. border
– Stephanie Levitz
Conservative Leader Pierre Poilievre is calling for Canadian soldiers to be sent to the border, along with military helicopters and surveillance.
Mr. Poilievre also wants an additional 2,000 border agents, an expansion of the Canada Border Services Agency powers so it can work along the entire Canada-U.S. Border, and the installation of more border surveillance to spot incursions.
In a video posted to social media, Mr. Poilievre says Canada’s border has been broken by inaction by the Liberal government, citing statistics on illegal firearms coming into Canada from the U.S, drug seizures at the border and migration challenges.
“President Trump’s administration has raised concerns and has put that as a rationale for imposing tariffs on Canada. These tariffs and these threats are wrong and unjustified, but it should not take a leader of a foreign country for the Liberals to scramble to fix their disastrous, broken border policy,” Mr. Poilievre said, referring to Mr. Trump’s decision to delay tariffs on Mexico because that country will reinforce its border with 10,000 national guard troops.
Read more here: Poilievre calls for soldiers at Canada-U.S. border in response to Trump
1:28 p.m. ET
Punitive economic measures can lead to the rise of extremist ideologies, Bob Rae warns
Bob Rae, who has served as Canada’s ambassador to the United Nations since 2020, says punitive economic measures can lead to the rise of extremist political movements.Sean Kilpatrick/The Canadian Press
– Chris Wilson-Smith
Bob Rae, who has served as Canada’s ambassador to the United Nations since 2020, says punitive economic measures can lead to unintended consequences, including the rise of extremist political movements.
In remarks delivered Monday morning via video to the University of Guelph, Mr. Rae highlighted the aftermath of the First World War, in which the Treaty of Versailles brought about severe sanctions on Germany. The resulting economic despair created fertile ground for extremist ideologies to take root, Mr. Rae said.
“I would just say parenthetically, unfortunately, some have not learned these lessons,” said Mr. Rae, who served as premier of Ontario between 1990 and 1995. “That’s why we’re dealing with this current tariffs crisis with the United States, because there are still some people in the United States who believe that the answer to the problems of the world and the problems of the United States are to impose higher and higher tariffs.”
“It creates incredible hardships for not only Americans and American industry, but also for those people who are being subjected to these tariffs, including Canada.”
1:19 p.m. ET
Significant ‘power inbalance’ for Canada in this trade war: accounting organization
The Canada-U.S. trade war is under way, and Canada’s relatively modest retaliation could be perceived as a sign of weakness, according to the Chartered Professional Accountants of Canada.
“The power imbalance is undeniable, and unfortunately, Canada finds itself on the losing side of it,” says David-Alexandre Brassard, CPA Canada’s chief economist. The potential ramifications for both countries could be severe, particularly with rising inflationary risks in the U.S., where Canadian and Mexican goods and services make up a quarter of total imports, he said in a news release Monday.
“The 25-per-cent tariff on these imports will undoubtedly increase costs for American consumers, while simultaneously weakening the competitiveness of Canadian businesses,” said Mr. Brassard.
“The challenge in a Canadian response is in finding the right balance between economic growth, inflationary pressures and trade retaliation.”
1:12 p.m. ET
Falling loonie drops to US$0.68
– The Canadian Press
The loonie plunged to US$0.68 cents as of midday Monday.
Karl Schamotta, chief market strategist at Corpay, says the loonie could see a further decline of two to three per cent if an agreement isn’t reached in the coming weeks, and risks falling even lower if markets predict the tariffs will be in place for a prolonged period of time.
Mr. Schamotta says a declining exchange rate is a telltale sign the economy is in trouble and long-term tariffs would drive Canada into a recession.
But Mr. Schamotta says there’s a silver lining – a weaker dollar could help offset the cost of tariffs for buyers around the world purchasing made-in-Canada goods.
1:03 p.m. ET
Trump’s personal feelings about Trudeau an obstacle to a deal: O’Leary
U.S. President Donald Trump, left, and Canadian Prime Minister Justin Trudeau talk prior to a NATO round table meeting in England, Dec. 4, 2019.Frank Augstein/The Associated Press
Canadian businessman Kevin O’Leary says Donald Trump’s disdain for Justin Trudeau is an obstacle to a deal between Canada and the White House.
“Trump doesn’t like Trudeau. Has no respect for him as a leader. This is not something new. This came from the first mandate way back,” Mr. O’Leary said.
“Trump works on personal relationships, not just with Canada, all around the world, and I don’t know if there’s any path to where he’s going to negotiate a deal with Trudeau.”
Mr. O’Leary, who has visited Mr. Trump’s Mar-a-Lago residence in Florida several times since the November, 2024 presidential election, said the American leader brought up his dislike of Mr. Trudeau during conversations with him there..
“Trump doesn’t work the way other political leaders work. He just doesn’t. After 12 years people don’t understand that. It’s personal.”
12:02 p.m. ET
North American stock markets pare losses after Mexico announces a tariff delay
– Globe Staff
North American indexes are paring their losses after Mexico’s President said the United States will delay its tariffs on Mexican imports by a month, easing some of the worries about a potential trade war.
The S&P 500 was down 0.7% in Monday morning trading after being down as much as 1.9% earlier. The Dow Jones Industrial Average trimmed its loss from 665 points to 162, while the Nasdaq composite fell 1%.
In Toronto, the S&P/TSX composite index was down 181.50 points, or 0.71%, at 25,351.60 at 10:57 a.m. ET after falling as low as 24,742.92 earlier in the trading session.
Some of the sharpest losses hit Big Tech and stocks that would be hurt most by higher interest rates and the worse inflation that could result from tariffs.
11:55 a.m. ET
Canadian steel industry facing ‘doomsday scenario’ with Trump’s tariffs
Workers weld steel at Steelcon, a structural steel design and fabrication company, before a campaign stop by Ontario Premier Doug Ford in St. Catharines, Ontario on Jan. 31.Carlos Osorio/Reuters
U.S. President Donald Trump’s imposition of 25-per-cent tariffs is a “doomsday scenario” for Canadian steel that will lead to job losses, the industry’s association says.
The Canadian steel sector is almost exclusively dependent on the U.S. for its exports and Canada has few options to sell the metal to other markets due to a global glut caused mainly by Chinese overproduction.
The tariffs will result in a vicious circle of less demand from U.S. customers and corresponding fewer imports from Canadian steelmakers. Many of the inputs Canadian steelmakers use, such as scrap iron ore, and coke, come from the U.S.
“Because we’re selling less, we’re going to probably lay off a lot of employees because a blast furnace cannot be switched on and off as we wish,” said François Desmarais, vice-president, trade and industry affairs with the Canadian Steel Producers Association.
Canada’s steel industry was hit with 25-per-cent tariffs in 2018 during Mr. Trump’s first term, but this time the tariffs are on all Canadian goods.
“This is unprecedented. We have no perspective or numbers on the magnitude of this,” Mr. Desmarais said.
Read more here: Canada’s steel sector is facing a dire impact from the imposition of 25-per-cent tariffs
11:50 a.m. ET
RBC CEO calls for government support for businesses, consumers affected by tariffs
Royal Bank of Canada chief executive officer Dave McKay is calling on political leaders to implement financial supports to help businesses and consumers weather the hit from tariffs.Frank Gunn/The Canadian Press
Royal Bank of Canada chief executive officer Dave McKay is calling on political leaders to reduce barriers to economic growth within Canada’s borders and to implement financial supports to help businesses and consumers weather the hit from tariffs.
Mr. McKay said in an e-mail to all RBC employees Sunday evening that Canada should remove internal trade barriers, accelerate energy and infrastructure projects, invest in technology innovation and improve tax competitiveness, according to the memo seen by The Globe.
“There are no winners in a prolonged trade war between allies, especially two nations that each have their own deep-rooted identity, unique culture and strong sense of independence,” Mr. McKay said.
“The tariffs could severely impact jobs and hurt affordability for Canadian and American workers and families, and many small and mid-sized businesses will be put at risk as the cost of doing business goes up.”
Some of Canada’s biggest bank CEOs have also jumped into the discussion on how the country and the financial sector could mitigate the impacts of tariffs:
Read more here: RBC calls for Ottawa’s support to develop programs, resources for consumers navigating trade war
11:35 a.m. ET
Ontario Premier Doug Ford says he hopes Canada also receives a tariffs pause
– Jeff Gray and Laura Stone
Ontario Premier Doug Ford says he hopes Canada can also receive a pause from U.S. tariffs after news that levies against Mexico have been halted for one month.
“We’re their number one customer. We’re their number one export destination,” Mr. Ford said at an unrelated announcement on Monday.
Asked if he thinks Canada can secure a similar agreement to Mexico, he said Canadian officials are doing “everything we can.”
“We’re working governor to premier, premier to senator and congress people, and all premiers are doing it. They’re reaching out to their counterparts. And we’re doing our job. And I know the Prime Minister is doing his job by contacting President Trump today and later this afternoon. That decision President Trump has made is so, so misguided. He underestimates the power and the will and the fortitude of Canadians,” Mr. Ford said.
“We’re their closest trading partner and ally.”
11 a.m. ET
Canada’s best hope for fighting a trade war may lie in U.S. courts
For Canada and others seeking to challenge the legality of Donald Trump’s tariffs, the best hope may lie in U.S. courts.
The International Emergency Economic Powers Act had never before been used to impose tariffs. That opens one potential legal avenue, on what are known as “nondelegation” grounds. In other words, can Mr. Trump exercise a power under IEEPA that Congress has not specifically delegated to the presidency?
At the same time, considerable legal obstacles stand in the way of anyone seeking to defeat the tariffs in court. One is whether tariffs are considered an economic or foreign affairs issue. If the court sees the tariffs as the latter, Mr. Trump is likely to win a more favourable reception.
Another question is whether Mr. Trump is exercising a new power. In 1971, Richard Nixon imposed blanket 10-per-cent tariffs on imported goods under the Trading with the Enemy Act, a predecessor to IEEPA – although it’s not clear that precedent will matter, since IEEPA employs different language.
Read more here: The best hope for Canada in fighting a trade war with Trump may lie in U.S. courts
10:52 a.m. ET
China vows retaliation as Trump tariffs pile on more economic stress
China is vowing retaliation after U.S.President Donald Trump slapped an additional 10-per-cent tariff on all goods from the country.
In a statement over the weekend, China’s Ministry of Foreign Affairs said it “firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests.”
Beijing is also pushing back against U.S. claims that it is not doing enough to tackle fentanyl trafficking – pointing to years of co-operation on this issue – and is threatening to file suit against Washington at the World Trade Organization.
Read more here: China to retaliate after Trump fires first measures in trade war
10:46 a.m. ET
Mexico says Trump has agreed to pause U.S. tariffs on her country for one month
Mexico’s President Claudia Sheinbaum said the US has agreed to pause the start of tariffs on Mexican goods for one month, after talks with her counterpart Donald Trump.YURI CORTEZ/AFP/Getty Images
U.S. President Donald Trump says he has agreed to delay 25-per-cent tariffs on Mexico for one month as the countries negotiate a long term deal on border security.
In a social media post, the U.S. President said Mexican President Claudia Sheinbaum agreed to deploy 10,000 Mexican soldiers to the border “to stop the flow of fentanyl, and illegal migrants into our country.”
“We further agreed to immediately pause the anticipated tariffs for a one month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico.”
Mr. Trump added: “I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries.”
Posting on X, Ms. Sheinbaum said she had a “good conversation with President Trump with great respect for our relationship and sovereignty” and confirmed Mexico will immediately reinforce the northern border The United States has also committed to working to prevent the trafficking of high-powered weapons to Mexico, she said.
The tariffs against Canada are set to take effect on Tuesday.
10:36 a.m. ET
Conrad Black offers advice to Trudeau on U.S. tariffs
Conrad Black, who President Donald Trump pardoned in his first term, has offered some words of advice to Prime Minister Justin Trudeau and his cabinet as Canada faces a trade war with the U.S.
“If someone in the beleaguered Liberal cabinet, with the authority to do so, called up the president and proposed two simple things, I suspect the trade war would end overnight,” he said in a post on X.
“Firstly, a modest earmark for stronger and collaborative border security measures (which would both satisfy Trump and redound to our benefit – see the Toronto police’s seizure of 900kg of cocaine two weeks ago, smuggled over the U.S. border, and note the vast majority of illegal firearms on Canadian streets come over the U.S. border).
“Secondly, make good on our long-overdue commitment as a member of NATO to contribute 3% of GDP to defense. Something we should be doing for decades.
“That’s it. My prediction is those two mutually beneficial ‘concessions’ with a bit of finesse would be enough to resolve the issue overnight.
“In my personal experience with Donald Trump, he is a tough negotiator, but I have never known him to reject a fair deal.”
10:32 a.m. ET
U.S. tariffs become main topic at EU leaders summit in Brussels
European Council President Antonio Costa, left, greets Ireland’s Prime Minister Micheál Martin as he arrives for an EU summit at the Egmont Palace in Brussels.Nicolas Tucat/The Associated Press
EU leaders have started their summit in Brussels and not surprisingly tariffs have become the main topic of discussion after U.S. President Donald Trump announced plans to slap hefty tariffs on U.S. imports from Europe.
Ireland’s Taoiseach, or Prime Minister, Micheál Martin, has urged caution in any response to the tariffs.
“First of all, we have to see what happens and assess it and measure it, calibrate the impacts, and then develop our response,” he told reporters on his way into the summit.
“But I wouldn’t do anything prematurely right now, until we see what exactly is being proposed, if something is being proposed. What is essential is that the European Union acts as one and will act as one. And I think in unity, there is strength.”
Ireland is among the EU member states that relies heavily on trade with the U.S. In 2023, around 28 per cent of all Irish exports were sold into the U.S.
10:26 a.m. ET
TSX drops over 2% as Trump tariffs unsettle investors
– Globe Staff
Canada’s main stock index opened lower on Monday as investors dumped risky assets after Ottawa retaliated against U.S. President Donald Trump’s tariffs on imports.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 2.4% at 24,920.36.
The Canadian dollar fell to its lowest level since 2003, trading at US$0.68 compared with US$0.69 on Friday.
Canadian government 10-year bond yields fell 14.8 basis points to 2.917%.
10:24 a.m. ET
Britain, European Union brace for U.S. tariffs
Britain and the European Union are bracing for U.S. President Donald Trump to impose sweeping tariffs on U.S. imports from Europe.
Tariffs “will definitely happen with the European Union,” Mr. Trump said over the weekend. “They don’t take our cars; they don’t take our farm products. They take almost nothing, and we take everything from the millions of cars, tremendous amounts of food and farm products.”
He added that the U.S. had a US$350-billion trade deficit with the EU and that the tariffs would be introduced “pretty soon.” Officials in Britain have also been keen to point out in recent days that the country doesn’t have a trade deficit with the U.S.
Stock markets in Britain and Europe fell sharply Monday morning in response to the rising trade tensions.
10 a.m. ET
Trump makes demand to allow American banks greater latitude to operate in Canada
Donald Trump is making fresh demands for Ottawa to allow American banks greater latitude to operate north of the border, following the first of two phone calls scheduled with Prime Minister Justin Trudeau on Monday.
“Canada doesn’t even allow U.S. Banks to open or do business there. What’s that all about?” Mr. Trump wrote on Truth Social.
He said he had just spoken with Mr. Trudeau and expects to speak with the Prime Minister again at 3 p.m. Monday.
“Canada has been very abusive of the United States for many years,” he told reporters after arriving back in Washington, D.C. from Florida.
Mr. Trump also accused Canada of being “very tough on oil, on energy. They don’t allow our farm products in, essentially. They don’t allow a lot of things in.
“And we allow everything to come in. It’s been a one-way street.”
Foreign banks, including American institutions, have operated in Canada for many years. The Office of the Superintendent of Financial Institutions currently regulates at least 15 foreign bank subsidiaries in Canada, including Citibank Canada, J.P. Morgan Bank Canada, and UBS Bank Canada.
Read more here: Trump wants U.S. banks in Canada, he says after speaking with Trudeau
9 a.m. ET
Ontario to cancel $100-million contract with Elon Musk’s Starlink, Premier Ford says
Ontario Premier Doug Ford says the province will rip up its $100-million contract with Elon Musk’s SpaceX to deliver high-speed internet to remote areas as part of the response to U.S. tariffs.Peter Power/The Canadian Press
– Jeff Gray and Laura Stone
Ontario Premier Doug Ford says he is cancelling a $100-million provincial contract for rural satellite Internet with Starlink, a company controlled by billionaire Elon Musk, a key supporter of U.S. President Donald Trump.
“Ontario won’t do business with people hell-bent on destroying our economy,” Mr. Ford said in a statement issued Monday by his Progressive Conservative Party re-election campaign.
Mr. Ford also said he was banning all U.S. companies from bidding on Ontario government contracts, until the 25-per-cent U.S. tariffs on Canadian goods being imposed on Tuesday are removed.
“U.S.-based businesses will now lose out on tens of billions of dollars in new revenues,” he said. “They only have President Trump to blame.”
He said the ban means U.S. firms will miss out on any piece of the $30-billion in goods and services the Ontario government and its agencies procure from the private sector each year, as well as any future contracts awarded as part of the province’s planned $200-billion in infrastructure spending over the next decade.
Read more: Ontario to cancel $100-million contract with Elon Musk’s Starlink
8 a.m. ET
Global shares sink, U.S. dollar climbs as markets assess impact of Trump tariffs
Global markets sank on fears that U.S. President Donald Trump’s tariffs on Canada, Mexico and China mark an opening salvo in a global trade war that would curb economic growth internationally.
Wall Street futures tumbled as investors considered what a full-blown trade war might mean to the U.S. economy.
‘Brace for impact’: Economists and market strategists react to trade war as loonie and stocks slide
TSX futures followed sentiment lower. As The Globe reports, the worst shock to global trade in nearly a century is expected to plunge Canada’s economy into recession this year. Companies are scrambling to overhaul their business models, while consumers are being warned to expect higher prices on some food items starting this week.
Meanwhile, the Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 67.60 US cents to 68.77 US cents in early trading. The Canadian dollar was down about 2.27 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, climbed 0.77 per cent to 109.21.
7 a.m. ET
Trudeau, Trump to talk today after U.S. mounts trade war
Canada will hit back at US tariffs with 25 percent levies of its own on select American goods, Prime Minister Justin Trudeau said on February 1.ANDREJ IVANOV/AFP/Getty Images
– Steven Chase and Nathan VanderKlippe
Canada unveiled the details of its first retaliatory barrage in an escalating trade war with the United States as U.S. President Donald Trump told Canadians they could avoid his punitive tariffs if they agree to be annexed as the 51st state.
Canadian officials said Sunday they are applying 25-per-cent retaliatory tariffs to 1,200 categories of American imports from chicken and orange juice to wine, refrigerators and motorcycles starting Tuesday.
The Department of Finance released a full list of products to be targeted in the first round of retaliation, one day after Mr. Trump launched a trade war against Canada.
Prime Minister Justin Trudeau is scheduled to talk to Mr. Trump on Monday. It’s not known who requested the call. On Saturday, Mr. Trudeau told reporters he had not spoken to Mr. Trump since the President had taken office. “Since the inauguration, I’ve been reaching out to speak with Donald Trump. I hope to speak with him some time soon,” the Prime Minister said Saturday.
Ottawa’s target list lays out products that will be hit in the first round of retaliatory tariffs and covers $30-billion worth of American products.
Canada is readying a second, broader round of retaliatory tariffs in 21 days that will affect another $125-billion in American imports.
Read more here: Canada releases list of tariffed items