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Newly re-elected President Trump, has hit pause on his promise to impose tariffs on Canadian goods, after Trudeau commits to increase border security, with Trudeau pledging $200 million in funding for a joint Canada-U.S. taskforce.
Trump paused similar proposed tariffs on Mexico earlier in the day on Tuesday, after saying they were needed due to the "extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, [which] constitutes a national emergency". For Canadians, the proposed 25% tariffs on all export goods to the US, and a 10% tariff on all energy exports, still threaten to send the nation into recession if Trump decides to follow through.
According to mainstream media, these tariffs could signal the beginning of a "trade war" and a "rupture" between the United States and Canada, that would mean billions of dollars being paid by Canadian and American citizens at the check-out counter, driving up inflation, and putting Canada into a recession.
Canada's main exports to the US including crude oil, energy products, motor vehicles, wood and paper products, and cereal, would all see an increase in cost for American buyers, who could then take their business outside Canada - leaving a devastating impact on Canadian producers, and causing ripple effects throughout the transportation and other industries.
Or, U.S. corporations could pressure Canadian exporters to reduce their prices to appease U.S. customers now slapped with a 25% extra charge on all Canadian products. This pressure ultimately could force producers out of Canada- and into the arms of Trump, where they could set up shop in the U.S., cutting countless Canadian jobs and huge sectors of productive industry.
$155 billion of retaliatory tariffs on imports from the U.S. to Canada were also paused by Trudeau on Tuesday. The significant dependence on U.S. imports, would mean the consumer prices for Canadians would rise if they are imposed, further increasing the current inflation. Canada brings in the majority of its imported products from the U.S. in the agri-food sector, as well as lumber, plastics, clothing and shoes, household appliances, furniture, and vehicles.
The long list of products imported from the U.S., the reliance on U.S. markets to purchase Canadian goods, puts clearly into light how severe Canada's economic dependence on the US has become- and how the U.S. is interested to increase the profits it can get out of Canada. So far, the Canadian government and corporations have done little to be able to stand up to big American business.
Ontario Premier Ford will also pause the retaliatory actions he announced, including cancelling a $100 million contract for satellite internet with Starlink, owned by Trump's close associate, and world's richest man, Elon Musk. This deal was set to provide rural Canadians with satellite internet, and was made after Starlink out-competed a Canadian company in a contract bidding war.
This deal is only one case of how Canadian made goods and services are undercut by politicians for cheaper out-of-country options. American corporations and billionaires like Musk and Trump continue to look to Canada to provide cheap goods, and a source of income for American corporations.