From rapid-fire trade actions to last-minute diplomatic solutions, this week’s developments have kept all of us on edge.
U.S. President Donald Trump initiated a 25% tariff on Canadian imports and a 10% tariff on Canadian energy, citing concerns about drug trafficking and human trafficking. The move threatened to cause substantial economic disruption, with University of Calgary economics professor Trevor Tombe warning that the tariffs could lead to a $160 billion economic loss for Canada, with potential job cuts of 600,000, particularly in manufacturing sectors.
Prime Minister Justin Trudeau responded with a $30-billion retaliation plan, targeting American goods, including beer, wine, bourbon, fruits, vegetables, clothing and perfume. Trudeau warned that the retaliation would escalate to $125 billion in tariffs over 21 days and highlighted the potential harm to American jobs, especially in the auto and manufacturing sectors.
Mexico, along with Canada, have imposed retaliatory tariffs on U.S. goods. Public sentiment in both countries includes growing frustration, with some Canadians planning to avoid American products and Mexicans considering a boycott as political leaders reaffirm their stance against the U.S. trade measures.
In a diplomatic breakthrough, Trump agreed to a 30-day tariff pause following intense negotiations with Trudeau who announced a $1.3 billion border plan, including designating cartels as terrorist entities, creating a joint strike force with the U.S. to combat fentanyl trafficking and appointing a “fentanyl czar.” While Ottawa’s counter-tariffs are also on hold, Trump warned that tariffs could still be imposed if a final economic deal is not reached.
Mexico also agreed to send 10,000 troops to the U.S. border in exchange for a one-month pause on tariffs, as most fentanyl enters the U.S. through cartel operations using Chinese precursor chemicals. Experts said improved detection technology and reduced U.S. demand are crucial to addressing the crisis.
Trudeau stated that less than 1% of fentanyl enters the U.S. through Canada, with minimal seizures at the Quebec border. While Quebec faces illegal crossings, the province does not consider fentanyl trafficking a significant issue despite federal efforts to combat the drug trade.
All of this is happening while the political landscape continues to become increasingly complex as opposition parties respond to the developing situation. Opposition parties are calling for Liberals to recall Parliament to prepare fully for U.S. President Donald Trump’s tariff threat ahead of its new deadline on March 4. However, Public Safety Minister David McGuinty assured that the government does not need an earlier recall than it is scheduled on March 24.
The Conservative Party criticized the move and called on Parliament members for its immediate return. The party also highlighted its preparedness to work on its proposed Canada First Plan to secure the border.
NDP Leader Jagmeet Singh emphasized that Ottawa must take advantage of the temporary suspension of tariffs and prepare for a response in the presence of the Parliament. Singh also reiterated his call for the government to review its purchasing rules to favour Canadian companies where workers are treated fairly and encouraged the public to support Canadian products instead of American ones.
Meanwhile, in response to Trump’s demands, Trudeau agreed to appoint a national “fentanyl czar” to delay tariff implementations amid criticisms that B.C. already has its own czar in the form of Dr. Bonnie Henry, according to Western Standard.
Critics, including B.C. Conservative leader John Rustad has accused Dr. Henry of promoting rather than combatting fentanyl use, with Rustad urging for her removal after she supported controversial harm reduction measures. The new national czar’s role remains undefined, although they are expected to coordinate between Canada and the U.S. to curb fentanyl trafficking, especially following significant drug busts and cross-border trafficking concerns.
During a news conference with Manitoba Premier Wab Kinew and MP Terry Duguid, McGuinty showed the scanner that could detect substances such as fentanyl. Kinew also emphasized the need for a secure border in Manitoba and clearing off fentanyl from its streets.
McGuinty also assured that there is no plan to assign soldiers to the Canada-U.S. border. The promised 10,000 frontline personnel on the border will only include border officers and intelligence officers behind the scenes.
In addition, Canada also pledged $200 million to fight organized crime and fentanyl trafficking, on top of the $1.3 billion plan of Ottawa. Aside from the appointment of a fentanyl czar, the fund will also be used to reinforce the 49th parallel with new choppers and technology.
Healthcare implications of the trade tensions were profound. Medtech Canada shared concerns about possible price hikes on medical devices like pacemakers, insulin pumps, and even MRI machines. Drug makers are also seeking tariff exemptions, with the Healthcare Distribution Alliance asking the Trump administration to carefully assess the inclusion of medical products in tariffs. The organization also emphasized that it could lead to new and worse shortages of important medications, a problem that will be passed down to patients.
Despite facing significant external pressures, the country demonstrated its diplomatic agility and economic resilience. As the temporary tariff pause provides a brief respite, questions remain about long-term economic stability, border security, and international trade relations. The coming weeks will be critical in determining the trajectory of U.S.-Canada economic interactions and Canada’s strategic response to ongoing challenges.
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