Trump Announces One Month Pause: U.S. President Donald Trump announced a one-month suspension of tariffs on Mexican imports under the Canada-U.S.-Mexico Agreement (CUSMA), offering temporary relief to Mexico. However, no similar move was made for Canada, keeping tensions high between the two North American neighbors.
Trump stated that the decision to delay Mexican tariffs until April 2 was made as an “accommodation” for Mexican President Claudia Sheinbaum, emphasizing their cooperative efforts on border security and fentanyl prevention.
Justin Trudeau Calls US-Canada Trade War ‘Unjustified’
Canadian Prime Minister Justin Trudeau and Trump held a phone call on Wednesday, which Trudeau described as “colourful” but “substantive.” Reports from The Wall Street Journal suggested the conversation was tense and included strong language.
Trudeau warned that Canada remains locked in a trade conflict initiated by the U.S., asserting that his government will not back down. He reiterated that the tariffs imposed by Trump’s administration are “unjustified” and vowed to stand firm until they are lifted.
Markets React as US Tariffs Disrupt Trade
The U.S. tariffs, implemented on Tuesday, sent shockwaves through financial markets. A sweeping tariff was placed on Canadian and Mexican imports, including a 10% levy specifically on Canadian energy exports. Ottawa quickly retaliated with $30 billion in counter-tariffs on American goods, with an additional $125 billion set to take effect in three weeks.
Ontario Premier Doug Ford announced a 25% increase in electricity prices for U.S. states importing power from Ontario, affecting approximately 1.5 million American customers in Minnesota, New York, and Michigan.
“It really bothers me,” Ford told CNN. “We have to do this, but I don’t want to.”
Commerce Secretary Predicts Trade Agreement Likely
U.S. Secretary of Commerce Howard Lutnick suggested on CNBC that a resolution could be on the horizon. He noted that both Canada and Mexico have made significant efforts to combat fentanyl trafficking, which might help ease negotiations.
“This comes from Canada doing an enormous amount of work on fentanyl, and so has Mexico,” Lutnick explained.
Despite this, Trump’s administration has continued to pressure both countries, hinting at further tariffs on automobiles, copper, lumber, and agricultural products.
Automotive Industry Granted Temporary Tariff Relief
One sector that secured a temporary exemption is the automotive industry. Trump announced a one-month exclusion for vehicles traded under CUSMA after lobbying efforts by major automakers, including Ford, General Motors, and Stellantis.
Trade Experts Warn CUSMA is ‘Effectively Suspended’
Canadian and Mexican trade negotiators have voiced concern that Trump’s tariffs undermine CUSMA. Canada’s chief trade negotiator, Steve Verheul, and Mexico’s chief negotiator, Ken Smith Ramos, argued that the agreement is now effectively inoperative.
“With 25% tariffs, it blows a complete hole in the trade agreement,” Verheul stated. “It makes it virtually worthless to us. In fact, it leaves Canada and Mexico in a worse position than any other country.”
The two negotiators played key roles in crafting CUSMA during Trump’s first term as president, replacing the North American Free Trade Agreement (NAFTA). Trump had previously called CUSMA “the best agreement we’ve ever made.”
US Justifies Tariffs Using Fentanyl Crisis
The Trump administration has justified the tariffs by invoking the International Economic Emergency Powers Act, declaring an emergency over fentanyl trafficking at the northern border. However, U.S. Customs and Border Protection data indicates that only a minimal amount of fentanyl—13.6 grams—was seized at the northern border in January, undermining the administration’s rationale.
Verheul strongly rejected the justification, stating, “Absolutely none of this is necessary.”
North American Trade Coalition Pushes Back
To counter Trump’s tariffs, Verheul, Ramos, and former U.S. Congressman Kevin Brady have formed the Coalition for North American Trade. The coalition aims to defend CUSMA and prevent the trade war from escalating further.
Brady, a former chairman of the U.S. House Ways and Means Committee, warned that the tariffs could have lasting consequences for American workers and families.
“Leaving this agreement or allowing it to expire will have a very damaging impact on millions of American workers and families,” Brady stated at the coalition’s launch in Washington.
Future of CUSMA Uncertain Amid 2026 Review
With a mandatory review of CUSMA scheduled for 2026, the future of the trade pact remains uncertain. The tariffs are widely seen as a strategic move to pressure Canada and Mexico into making concessions ahead of the review process.
Experts say the best-case scenario would be a renegotiation of specific elements of CUSMA to satisfy all three countries, but given the current geopolitical climate, that appears unlikely.
“Canadians think the U.S. is no longer a reliable trading partner,” Verheul said, emphasizing growing frustrations in Ottawa.
