U.S. President Donald Trump has announced another delay on tariffs affecting Canada and Mexico, significantly impacting trade under the Canada-United States-Mexico Agreement (ACEUM) just days after enforcing tariffs. On Thursday, March 6, 2025, his administration declared nearly a one-month postponement on the 25% tariffs set to apply to goods accepted under the ACEUM.
The move includes the suspension of duties on $125 billion worth of U.S. products which Canada has previously planned to tax as retaliation. Last week, Canada levied its own tariffs on approximately $30 billion worth of U.S. goods. After this reversal by the U.S., Canadian Finance Minister Dominic LeBlanc noted via X (formerly Twitter) on Thursday, "The United States has agreed to suspend tariffs on Canadian exports compliant with ACEUM until April 2. Canada, for its part, will not proceed with the second imposition of tariffs on U.S. products until then as well, as we continue working to lift all tariffs."
The presidential decree not only formalizes this suspension but also reduces tariffs on potash—a key fertilizer—imported from Canada from 25% to 10%. This adjustment highlights the importance of Canadian agricultural products for U.S. farmers.
Trump, addressing the media from the Oval Office, sought to downplay the downward trends on stock markets, attributing them to globalist interests dissatisfied with his administration's tariff strategies. "Many of them are globalist countries and companies who will not fare as well, because we are taking back things taken from us years ago," he stated, adding, "The countries and companies who have ripped us off are not particularly happy with what I am doing. But the United States will be very happy," Trump emphasized, neglecting the concerns raised by some sectors within American industry about the tariffs.
Trump’s remarks follow the significant discussions he had with Canadian Prime Minister Justin Trudeau earlier this week. Trump described their lengthy 50-minute phone call on March 5 as "colorful" and substantive but did not shy away from expressing his frustrations on social media later, narratively questioning Trudeau's political future amid the trade conflicts. The U.S. President remarked, "I realized he [Trudeau] was trying to leverage this tariff issue as a campaign tool for his continuing leadership—good luck, Justin!" This reflects Trump’s often informal and combative style when engaging with foreign leaders.
Trudeau, for his part, reiterated Canada’s position of resisting piecemeal agreements and emphasizing the end goal of completely removing all tariffs. He stated on the resurgence of tariffs, "Our objective remains the elimination of all tariffs—of all tariffs," pointing out Canada's unequivocal stand against the punitive measures initiated by the Trump administration.
Responding to questions about the negotiations’ progress, Trudeau indicated the importance of continuing diplomatic talks and, as the Liberal Party prepares for leadership elections on March 9, he made clear his intent to pass on the premiership shortly thereafter.
This trade unrest not only affects policy but the economy itself, with markets showing signs of turbulence as investors fear the ramifications of trade wars. Recent stock percentages have dipped, with some analysts indicating warnings of stagflation. Scott Bessent, Treasury Secretary, has tried to calm fears by focusing on strong fundamentals, stating, “I am not worried about inflation over the long term.”
The suspension of tariffs until April 2 may provide temporary relief but is coupled with the impending imposition of reciprocal tariffs, which threaten to complicate trade relations consistently. Trump has asserted previously announced tariffs on steel and aluminum will proceed as scheduled next week, ensuring numerous products from both Canada and Mexico remain under the looming threat of tax repercussions.
Canada insists on maintaining pressure on the U.S. to result in the total elimination of unjustified tariffs. With international markets reeling from the uncertainty, it remains to be seen how this latest policy change will alter the future interaction between the two nations, as Canada and Mexico continue their trade with the U.S. under the ACEUM agreement.
The evolution of this scenario, based on real-time discussions and adjustments to tariffs, will be pivotal for both Canadian and American economies as they navigate the politically charged atmosphere leading up to the Liberal Party's leadership transition and beyond.