In a recent U-turn, President Donald Trump has announced a 30-day pause on tariffs for Canada and Mexico, which were imposed via executive orders signed on February 1, 2025.
President Trump had justified the imposition of the tariffs by stating that Canada and Mexico had failed to stem illegal immigration into the US, as well as prevent fentanyl from being imported into the country. Our update regarding the pause on U.S. tariffs to be imposed on Mexico is available here.
The pause on U.S. tariffs to be imposed on Canada follows a phone call with Canadian Prime Minister Justin Trudeau, and is aimed at fostering “deals” between the U.S. and Canada. Terms of the negotiated pause include implementation of Canada’s $1.3 billion border plan to stop the flow of fentanyl, with nearly 10,000 frontline personnel working on protecting the border, the introduction of a “Fentanyl Czar”, listing cartels at terrorists under Canada’s Criminal Code, and the creation of a Canada-U.S. Joint Strike Force to combat organized crime and fentanyl with a CAD 200,000,000 funding commitment.
President Trump suggests that the pause is meant to achieve a “final Economic deal” with Canada, foreshadowing that economic commitments by Canada may be required in order to terminate the proposed tariffs as a U.S. priority. What types of economic commitments that may be on the negotiating table remain unknown; however historical U.S.-Canada trade disputes have centred on softwood lumber and dairy and Trump has criticized Canada’s failure to meet NATO funding commitments.
Elsewhere, President Trump’s 10% tariffs on Chinese imports have officially come into effect. This has led to a swift response from China, which has implemented a number of retaliatory measures, including 10-15% tariffs on a range of US goods.
Whether the pause with Canada will stay in place remains to be seen; our Global Customs team, including our attorneys and practitioners in the US, Mexico, Canada, and China have been following these developments closely, and will continually update our Import and Trade Remedies Blog as developments occur. Baker McKenzie will also be hosting a webinar on Trump and Tariffs: Focus on the US, Canada and Mexico on February, 5, which will provide practical experience on best practices to mitigate operational disruption in response to current trade disruption, as well as insights into what we can expect from the Trump administration moving forward.
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