OTTAWA—American President Donald Trump amped up his threat to slap 25 per cent tariffs on Canadian products, saying the tariffs on Canada and Mexico are “coming on the first, Saturday” and that the tariffs could “rise with time.”
Speaking to reporters in the Oval Office, Trump said Thursday that he will impose the 25 per cent tariff on both Canada and Mexico “for a “number of reasons,” listing his top three concerns as illegal immigration, illegal drug flows and “the massive subsidies we’re giving to Canada and to Mexico in the form of (trade) deficits.”
“Those tariffs may or may not rise with time,” he added.
When asked if he would exclude tariffs on oil imports to America, Trump said, “Oil is going to have nothing to do with it,” but later in his remarks said, “We may or may not” put tariffs on oil.
“We’re going to make that determination probably tonight (Thursday) on oil, because they send us oil, we’ll see. It depends on what the price is. If the oil is properly priced, if they treat us properly, which they don’t — look, Mexico and Canada have never been good to us on trade.”
Canada has argued that any tariffs on Canadian crude oil and gas will drive up the prices for American businesses and consumers at the pump, but Trump has touted a plan to make the U.S. independent and “dominant” in energy production.
Trump said, as he has several times in the last few weeks, that the U.S. does not need Canada’s exports. “We have all the oil you need. We have all the trees you need, meaning the lumber. … In oil, we have more than anybody,” he said Thursday.
He pivoted to criticize China as a source of illegal fentanyl via Mexico, “so China is going to end up paying a tariff also for that, and we’re in the process of doing that. We’ll make that determination of what it’s going to be.”
Minutes before Trump spoke, a federal Canadian official with direct knowledge of the status of talks in Washington told the Star that the Trudeau government had received no assurance whatsoever there would be any delay in tariffs, contrary to rumours circulating in the two capitals.
After Trump spoke, Matthew Holmes of the Canadian Chamber of Commerce, echoed the Canadian government’s warnings.
“President Trump’s tariffs will tax America first,” said Holmes in a statement. “Tariffs cascade through the economy and end up hurting consumers and businesses on both sides of the border. This is a lose-lose.”
Trump’s remarks came a day after his nominee for commerce secretary, Howard Lutnick, who would oversee tariffs, told his confirmation hearing that the administration could delay tariffs if Canada could demonstrate that it has “shut its borders.” He tied immediate tariffs explicitly to the desire to stop fentanyl smuggling, saying it is responsible for the deaths of hundreds of thousands of Americans. But he also suggested broader tariffs would come in April.
As for Trump’s warning about a Feb. 1 tariff threat, Lutnick had said, “It is not a tariff per se. It is an action of domestic policy.”
“Shut your border and stop allowing fentanyl into our country, killing our people.” He suggested that, “As far as I know, they (Canada) are acting swiftly, and if they execute it, there will be no tariff. And if they don’t, then there will be.”
Foreign Affairs Minister Mélanie Joly later called Lutnick’s comment “positive.” But she said, “It’s the president who will make the decision.”
She held meetings Wednesday with other key Republicans in Washington, including Trump’s Secretary of State Marco Rubio, but in an evening news conference with Canadian reporters, Joly underscored the “unpredictability” of the Trump administration.
As the uncertainty swirls, Joly, Public Safety Minister David McGuinty and others are continuing to argue Canada’s case.
Joly met with Republican Sen. Kevin Cramer, chair of a Canada-U.S. economy and security caucus, as part of a strategy to reach out to “key Republicans” and said she told Rubio how Canada is implementing its $1.3-border security plan, and how tariffs would hurt Canadians and Americans on both sides of the border.
“I also made clear that should tariffs be imposed, we would retaliate, and everything was on the table,” she said.
Flavio Volpe, head of Canada’s Automotive Parts Manufacturers’ Association, said in an interview the prevailing uncertainty has caused many investors who are not already in planning or purchase stages on their projects to pause investments “to understand the impacts of potential tariffs before proceeding.”
“Everyone is talking about tariffs, a trade war, and matching them,” he said. “But the reality is that’s probably a first response. The second response is looking for a mutual off-ramp.”
That’s behind the drive to connect with American decision makers, he said. But Volpe also admitted many of the people — senators and governors — that Canada might expect to be sympathetic are “loath to engage” until it’s clear what tariffs Trump imposes, on what timeline, and whether it is something that markets would actually respond to.
Industry Minister François-Philippe Champagne said Trump’s tariff threat is an “electro shock” for Canada and it should be a “wake up call” and an “opportunity” for Canada to rebuild and protect its own industries.
He plans to take a message to the American defence sector next week when he travels with Defence Minister Bill Blair: that Ottawa is “looking at a Canada first procurement policy.”
“That’s going to be the clear, simple message I’m going to bring to the CEOs in the United States. They better start partnering, investing in Canada, because these defence dollars will have to serve Canadian industry.”
Lutnick said Trump’s administration will target better access to Canadian dairy markets. But Champagne expressly ruled out any concessions that would hurt Canada’s dairy farms, which operate under a “supply management” system that protects production quotas and prices.
“Respect goes also both ways and facts matter,” said Champagne. “And the reality is that we’re the biggest customer of the United States.”
He said, “there cannot be tariffs without consequences … and there cannot be tariffs without higher prices for U.S. consumers. They understand that.”
The Trudeau government has struggled to get a common Canadian front on how to respond to tariffs. It says nothing is off-limits in its retaliation strategy, including export tariffs or restrictions on Canadian energy shipments to the U.S. — despite adamant opposition from Alberta Premier Danielle Smith and Saskatchewan’s Scott Moe.
Smith and other premiers are pressing Ottawa to accelerate defence spending plans and to meet or exceed the two per cent NATO target. In a statement to the Star, Smith said she recommended that Trudeau immediately appoint a “Canadian border czar to work with the U.S. on securing our shared border from fentanyl dealers and illegal migrants.”
During the meeting between Trudeau and premiers Wednesday, Smith said, she urged the prime minister “to consider establishing a joint Canada-U.S. NORAD region base in northern Canada,” similar to the Canadian NORAD Region headquarters in Winnipeg, in order to bolster Arctic security — another of Trump’s concerns.
