Canada, US strike temporary deal: Tariff war paused, border crackdown begins

World news: In a significant development, Canadian Prime Minister Justin Trudeau announced on Monday that the 25% tariffs imposed by US President Donald Trump on Canadian exports will be temporarily paused for at least 30 days. The decision comes as both leaders agreed to work toward addressing critical issues such as illegal immigration and the fentanyl crisis. Canada had initially planned retaliatory tariffs on US imports, targeting key sectors such as beer, wine, household appliances, and sporting goods. However, following discussions, both sides opted for a temporary ceasefire in the escalating trade war.

Canada’s $1.3 Billion border security plan

To tackle the growing concerns over border security and drug smuggling, Trudeau unveiled a $1.3 billion initiative aimed at strengthening Canada’s border. The plan includes deploying advanced surveillance technology, increasing personnel, and enhancing cooperation with US authorities.

"Nearly 10,000 frontline personnel are and will be working on protecting the border," Trudeau stated on X.

‘Fentanyl Czar’ and joint strike force to combat organized crime

To crack down on the fentanyl crisis, Trudeau announced a series of aggressive measures, including the appointment of a Fentanyl Czar and listing cartels as terrorist organizations.

"In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, and launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl, and money laundering. I have also signed a new intelligence directive on organized crime and fentanyl, and we will be backing it with $200 million," Trudeau added.

Trade relations between US and Canada

Canada remains one of the US’s largest trading partners. In 2023, the US imported Canadian goods worth $419 billion, making Canada a crucial economic ally. Additionally, Canada is the largest foreign supplier of oil to the US.

According to Canadian government data, the US is the only country with which Canada saw a growing trade surplus in late 2024. "Exports to the United States rose 6.8% in November, while imports increased 4.1%. As a result, Canada's trade surplus with the United States widened from $6.6 billion in October to $8.2 billion in November," a report stated.

Trump’s response: ‘Fairness for all!’

President Trump confirmed that his conversation with Trudeau was productive, stating, "As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for 30 days to see whether or not a final economic deal with Canada can be structured. FAIRNESS FOR ALL!"

A history of tariff disputes

This is not the first time Trump has temporarily halted tariffs amid negotiations. Earlier, he had paused new tariffs on Mexico for one month after Mexican authorities agreed to deploy 10,000 National Guard troops to strengthen border security and curb illegal migration and drug trafficking.

With the 30-day tariff pause in effect, all eyes will be on upcoming negotiations between Canada and the US, as both countries strive to strike a deal that balances economic interests and security concerns.