Canada Will Pause 2nd Phase of Retaliatory Tariffs After Trump’s Latest Reprieve

Finance Minister Dominic LeBlanc attends a first ministers meeting in Ottawa on Jan. 15, 2025. The Canadian Press/Sean Kilpatrick

Finance Minister Dominic LeBlanc said Ottawa will delay a second round of retaliatory tariffs on the United States, as President Donald Trump has announced a one-month pause of tariffs on exports compliant with the United States-Mexico-Canada Agreement (USMCA, or CUSMA). However, he said Canada’s first phase of tariffs will remain in place.

“The United States has agreed to suspend tariffs on CUSMA-compliant exports from Canada until April 2nd,” LeBlanc said on X on March 6.

“Canada will not proceed with the second wave of tariffs on $125 [billion] of U.S. products until April 2nd, while we continue to work for the removal of all tariffs.”

The second phase of tariffs on CA$125 billion of American exports was set to kick in on March 25. But now, they will be delayed to April 2, the same date Trump’s latest pause expires. Ottawa’s initial 25 percent tariffs on CA$30 billion of U.S. goods are still in effect.

Hours earlier, Trump signed two executive orders that amended tariffs imposed on Canada and Mexico on March 4. Goods that fall under the USMCA, which was signed during Trump’s first term in office, will now be exempt from the tariffs for another month.

According to the White House, around 50 percent of American imports from Mexico are covered by the trade agreement, while 38 percent of Canadian goods are covered. The executive order Trump signed also lowered tariffs on Canadian potash from 25 percent to 10 percent, keeping them in line with U.S. tariffs on Canadian energy.

On March 5, the United States also announced that its big three automakers—Ford, Stellantis, and General Motors—along with any cars from Canada and Mexico that comply with USMCA would also get a one-month exemption on tariffs.

Trudeau had held a call with Trump on March 5 that didn’t result in a breakthrough on tariffs on the same day. He said on March 6 that Canadian officials have been engaged in “ongoing conversations” with the U.S. administration but “we don’t yet have anything to officially announce.”

Trump has said the first wave of his tariffs are to get Canada and Mexico to stop the flow of illegal immigrants and fentanyl into the United States through their borders.

The U.S. president has also signed an order to impose 25 percent tariffs on all imports of steel and aluminum, including from Canada, starting on March 12.

He has also ordered his officials to review existing trade agreements, and to recommend tariffs in response to any trade practices deemed unfair to the United States, by April 2.

“On April 2, we’re going to move with the reciprocal tariffs, and hopefully Mexico and Canada will have done a good enough job on fentanyl that this part of the conversation will be off the table, and we'll move just to the reciprocal tariff conversation,” U.S. Secretary of Commerce Howard Lutnick said on March 6.

Besides the federal government, Canada’s provinces have also introduced a set of retaliatory measures. Ontario Premier Doug Ford said his province will start imposing a 25 percent surcharge on all energy exports from his province to the United States starting on March 10.