U.S. President Donald Trump said there is nothing Canada can do “right now” to avoid new tariffs that will be imposed starting Saturday — including on oil — just hours before that deadline was set to kick in.
Canada and Mexico are set to face 25 per cent tariffs on all goods imported to the U.S., but Trump said he may lower that number to 10 per cent on Canadian oil.
″I’m probably going to reduce the tariff a little bit on that,” Trump said from the Oval Office Friday evening when asked about exemptions for oil. “We think we’re going to bring it down to 10 per cent.”
Trump reiterated familiar complaints about fentanyl flowing into the U.S. from Canada and Mexico and the longstanding trade deficit the U.S. has with Canada.
China is set to face a 10 per cent tariff starting Saturday as well, on top of existing duties, which Trump said is also due to fentanyl.
He denied the threat of tariffs were being used as a negotiating tactic to get those countries to do more on border security, and it was “purely economic.”
“We’re not looking for a concession,” he said. “We’ll see what happens.”
The comments appeared to dash any hopes from Canadian officials that a diplomatic solution, along with additional border security investments, could sway Trump. Multiple Canadian officials were in Washington this week to persuade Trump administration officials and U.S. lawmakers on the economic costs to both countries.
Foreign Affairs Minister Melanie Joly told reporters Friday night the Canadian government had “yet to see any formal decision-making” or specific details from the White House on tariffs.
“We’re still engaging,” she said alongside Public Safety Minister David McGuinty and Immigration Minister Marc Miller. “We’re making our case, and we have a very strong case.”
Earlier Friday, Prime Minister Justin Trudeau warned the United States of a “purposeful, forceful but reasonable immediate response” if tariffs are imposed on Canada.
“It’s not what we want but if he moves forward, we will also act,” he told reporters before meeting with the newly formed Canada-U.S. relations council in Toronto. “We’re ready for whatever scenario comes forward.”
Trudeau said tariffs would have “disastrous consequences” for the U.S, putting American jobs at risk and causing prices to rise. Trudeau reiterated that less than one per cent of the fentanyl and illegal crossings into the U.S. come from Canada, a fact backed up by U.S. Customs and Border Protection data.
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“I think Justin Trudeau would be wise to talk to President Trump directly before pushing outlandish comments like that to the media,” White House Press Secretary Karoline Leavitt told reporters when asked about those comments.
Joly said the Prime Minister’s Office has been in contact with the White House, including on Friday.
Ontario Progressive Conservative Leader Doug Ford, who’s currently running for re-election as premier, said it still remained to be seen if Trump will follow through.
“Right now, I don’t think anyone knows what’s happening down there,” he told reporters at a campaign event Friday.
“We’ll be prepared, we’ll be ready, and as soon as these tariffs come, we’ll match them dollar-for-dollar, tariff-for-tariff.”
Economists and business executives have warned that the tariffs would spark major increases in the prices of imports such as aluminum and lumber from Canada, fruits, vegetables, beer and electronics from Mexico and motor vehicles from both countries.
The tariffs carry both political and economic risks for Trump, who is just two weeks into his second term. Many voters backed the Republican on the promise that he could tamp down inflation, but the possibility of tariffs could trigger higher prices and potentially disrupt the energy, auto, lumber and agricultural sectors.
The United States imported almost 4.6 million barrels of oil daily from Canada in October, according to the U.S. Energy Information Administration. U.S. daily production during that month averaged nearly 13.5 million barrels a day.
The import of cheap crude oil from Canada, which many American refineries rely on, helps keep U.S. gas prices low and is the main reason for the U.S. trade deficit with Canada that Trump often complains about, economists say.
A rise in oil import prices due to tariffs would push American oil companies to source their crude from communist Venezuela, the Canadian government has said. U.S. officials were in Venezuela this week meeting with government leaders there.
Tariffs ’cause success,’ Trump says
The White House earlier Friday confirmed the tariffs on Canada, Mexico and China were still set for Saturday.
“I was just with the president in the Oval Office, and I can confirm that tomorrow, the Feb. 1 deadline that President Trump put into place in a statement several weeks ago, continues,” Leavitt told reporters.
“These are promises made and promises kept by the president.”
Trump added Friday he is looking at tariffing all international imports of steel, aluminum, pharmaceuticals and semiconductor chips, including those used for artificial intelligence. He also raised a Feb. 18 start date for tariffs on foreign oil and gas.
He said the European Union would also see “substantial” new tariffs, and that announcements on those would come in weeks.
Trump directed his administration last week to study the issue of international trade deficits and potential tariffs, with reports due back April 1.
It remains to be seen how Trump will impose the tariffs. The president has several executive authority powers at his disposal, including the declaration of a national emergency to justify managing imports, which is typically a congressional authority.
“You can see the power of the tariff,” Trump said Friday evening. “Nobody can compete with us because we have by far the biggest piggy bank.”
He also denied tariffs would lead to widespread cost increases for American consumers.
“Tariffs don’t cause inflation, they cause success,” he said. “There could be some temporary short-term disruption, and people will understand. … The tariffs are going to make us very rich and very strong.”
The Bank of Canada said this week that the tariffs on Canada would lead to an inflation hike in the U.S. and an economic downturn in Canada, including lost business investment and jobs.
A study this month released by the Peterson Institute for International Economics concluded 25 per cent tariffs on Canada and Mexico and 10 per cent tariffs on China “would damage all the economies involved, including the U.S.’’
Leavitt said the minimal economic impacts of tariffs during Trump’s first term should reassure Americans that prices won’t rise this time. But those earlier tariffs were far more selective — targeting Canadian steel and aluminum, for instance — whereas his current policy targets all goods from entire countries.
“The president is intent on ensuring that he effectively implements tariffs while cutting inflation and costs for the American people,” Leavitt said.
Were border security improvements done in vain?
Earlier this week, Canadian officials had expressed confidence that their arguments to Trump and his allies in Washington were “resonating,” and that pitches for enhanced trade, energy and border security partnerships were being received with excitement.
They also pointed to comments that Howard Lutnick, Trump’s nominee for U.S. commerce secretary who would oversee trade policy, made to U.S. senators this week that Canada and Mexico could avoid the 25 per cent tariffs if they “shut their borders” to fentanyl.
Ottawa is looking to strike a joint task force with the U.S. to combat fentanyl, McGuinty said shortly after Lutnick’s comments. Other cabinet ministers have sent videos and photos of new enforcement measures and equipment at the border to display Canada’s commitments.
“We’ve made huge improvements on different fronts, including dealing with migration, dealing with the fentanyl problem,” McGuinty said Friday. “We continue to make progress, and we’re very encouraged.”
Miller added it was still important to work with the U.S. and ensure that facts prevail on what Canada is doing to keep the border secure.
“As frustrating as it can be seen that these things may be seen to be done in vain, we absolutely have to try,” he said.
“I understand the sentiment that people feel that this might be useless, but I think it isn’t.”
—With files from Global’s Jillian Piper and Saba Aziz, Reuters and the Associated Press