U.S. President Donald Trump said he will go ahead with imposing 25 percent tariffs on Canada and Mexico on Feb. 1, adding that the tariffs could rise over time. He also said that oil may be exempted from the tariffs, and the decision on that could come by the end of the day on Jan. 30.
“I'll be putting the tariff of 25 percent on Canada, and separately, 25 percent on Mexico, and we will really have to do that, because we have very big deficits with those countries,” Trump told reporters at the White House on Jan. 30.
The president said the 25 percent tariffs would be implemented on Feb. 1, and that they “may or may not rise with time.”
Trump said he would be putting the tariffs on because of illegal immigration and drugs like fentanyl coming over the border into the United States. The U.S. Customs and Border Protection
intercepted 43 pounds of fentanyl at the Canadian border during the 2024 financial year, while 21,000 pounds were seized at the Mexican border.
Trump also mentioned the trade deficit Washington has with the two countries, which he referred to as “the massive subsidies that we’re giving to Canada and to Mexico.”
While Trump said the United States has been “subsidizing Canada to the tune of [US]$175 billion a year,” an
analysis by TD Bank found Canada’s trade surplus for merchandise with the United States was on track to reach $100 billion (US$69 billion) in 2024, while the surplus would only be around $60 billion (US$41 billion) if Canada’s energy exports to the country were included in the calculation.
When asked if the tariffs would include oil, he said they “may or may not” and the United States would make the decision by the end of Jan. 30. He said it would depend on “if the oil is properly priced, if they treat us properly,” but added that Canada and Mexico “have never been good to us on trade.”
“We will be able to make that up very quickly because we don’t need the products that they have. We have all the oil you need. We have all the trees you need—meaning the lumber—we have more than almost anybody in those two categories,” he said.
While Trump repeatedly promised to lower the cost of living for Americans during his election campaign by increasing energy production, an
analysis from the Canadian Energy Centre found 25 percent tariffs on Canadian oil would lead to higher gasoline and energy prices for Americans.
On Jan. 29, Trump’s nominee for commerce secretary, Howard Lutnick,
told a U.S. Senate hearing that Canada could first face emergency tariffs, which may be avoided if it took sufficient action to secure its border.
But Lutnick also said Canada could be hit with a second round of tariffs in the spring, which would come after the United States Trade Representative and Commerce Department finish their study on using U.S. tariffs to address its trade deficits with other countries.
Ottawa’s Attempts to Stop Tariffs, Prepare for Them
The Canadian Chamber of Commerce
has estimated 25 percent tariffs could shrink Canada’s economy by 2.6 percent and impact 2.3 million Canadian jobs, while Ontario Premier Doug Ford
said the tariffs could cost 450,000 to 500,000 jobs in his province alone.
Since Trump first announced in late November that he would impose tariffs on Canada and Mexico unless they dealt with their border problems, Canada has attempted to assure Washington that it has been taking action to do so.
In December, Ottawa announced
a $1.3 billion strategy to curb illegal immigration and drug trafficking at the Canada–U.S. border. The plan involves the creation of a new North American task force targeting crime and drug trafficking, new artificial intelligence tools to address the flow of illegal drugs, and more funding for helicopters, drones, and surveillance towers.
On Jan. 7,
Trump said he would still impose “substantial” tariffs on Canada, and that he would use “economic force” to merge Canada with the United States, adding that getting rid of the border would “really be something.” Trump has repeatedly said Canada would be better off as an American state, and referred to Prime Minister Justin Trudeau as “Governor Trudeau.”
Trudeau
said Jan. 17 that Canada would “not hesitate” to retaliate against U.S. tariffs, and that Ottawa would support regions or industries impacted.
Alberta Premier Danielle Smith has come out against cutting off energy supplies to the United States and imposing export tariffs on Alberta energy, which has been floated as a potential retaliatory measure by Trudeau.
In 2022, 52 percent of U.S. total petroleum imports and 60 percent of gross crude imports came from Canada. In 2023,
Alberta accounted for 87 percent of Canadian oil exported to the United States.
Premier Ford
responded to Trump’s Jan. 30 statement by saying the president is “hellbent on undermining Canada.” Ford added that the Canadian government needed to be ready to immediately respond with ”dollar for dollar” tariffs on the United States.
“Canada won’t start this fight, but we have to be ready to win it,” he said.
