Announcement by the President of the United States regarding the imposition of tariffs

On February 1st, 2025, President Donald Trump announced that tariffs will be imposed on Canadian imports to the United States. The U.S. government will impose across-the-board tariffs of 25% on Canadian goods starting Tuesday, February 4th, and 10% tariffs on oil and gas, starting Tuesday, February 4th as well. All sectors of the economy are affected. This was done through the International Emergency Economic Powers Act (IEEPA). The Executive order mentions that tariffs could increase should Canada impose counter-tariffs.

These tariffs aim to pressure Canada and Mexico to address border security and fentanyl trafficking in North America.

Meanwhile, the Secretary of Commerce, in collaboration with the Secretary of Treasury and the U.S. Trade Representative, is tasked with assessing the causes of persistent U.S. trade deficits by April 1st and recommending corrective measures, such as the imposition of additional tariffs.

Reactions

Donald Trump, President of the United States:
“Today, I have implemented a 25% Tariff on Imports from Mexico and Canada (10% on Canadian Energy), and a 10% additional Tariff on China. This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our citizens, including fentanyl. We need to protect Americans, and it is my duty as President to ensure the safety of all. I made a promise on my campaign to stop the flood of illegal aliens and drugs from pouring across our Borders, and Americans overwhelmingly voted in favor of it.”

Justin Trudeau, Prime Minister of Canada:
The Prime Minister announced retaliatory measures to the U.S. tariffs on Canadian steel and aluminum. His response is addressed to both Americans and Canadians, emphasizing the importance of the bilateral relationship and the consequences of the U.S. decisions.

Canadian Response: Tariffs
In response to the U.S. decisions, Canada is imposing 25% tariffs on $155 billion worth of U.S. goods.

• Starting Tuesday, $30 billion worth of products will be affected.
• In 21 days, an additional $125 billion will be affected, giving Canadian businesses time to adjust.

The products targeted range from beer and wine to household appliances and building materials. Other non-tariff measures are also under consideration.

Pierre Poilievre, Leader of the Official Opposition:
The Liberals must put aside their partisan interests and recall Parliament now to pass a Canada First Plan that will:

• Retaliate with dollar-for-dollar tariffs carefully aimed at maximizing impact on American companies while minimizing impact on Canadian consumers. That means targeting U.S. products that we can make ourselves, buy elsewhere or do without. For example, we must retaliate against American steel and aluminum, as Canadians can make those vital products at home.
• Put all the tariff revenues into help for affected workers and businesses. Government should not keep a dime of the new revenue.

François Legault, Premier of Québec:
Quebec is preparing to face the consequences of American tariffs on steel and aluminum. While the situation presents challenges, it also offers opportunities for Quebec businesses.

• Penalization of American companies working with the Quebec government. This could create difficulties in the months and years to come.
• Estimated job losses of more than 100,000 in Quebec if the 25% tariffs remain in place.

Doug Ford, Premier of Ontario:
The coming days and weeks will be incredibly difficult. Trump’s tariffs will devastate our economy. They’ll put 450,000 jobs at risk across the province. Every sector and region will feel the impact.”

Analysis

It is clear that the U.S. President is aiming to exert pressure on his country’s economic partners as part of a broader negotiating strategy. NATIONAL anticipates that threats concerning tariffs will persist in the coming weeks and months.

NATIONAL recommends the following approach:

1. Determine if you are affected by the tariffs; assess the financial impacts of the tariff imposition on your supply chains, cost structure, and competitiveness.
2. Assess both direct and indirect economic impacts on your sector.
3. Contact your NATIONAL advisor for a personnalized solution to determine the right approach.

Key things to monitor

• How American, Canadian, and Mexican markets will react Monday.
• The implementation of aid programs for businesses and workers who will be affected by the tariffs.
• The minister of Finance, Dominic Leblanc, will meet with the Governor of the Bank of Canada and CEOs of all the major Canadian banks.

Your NATIONAL team is closely monitoring the situation and remains available at all times to address your questions and provide tailored strategic advice. Our goal is to support you as effectively as possible through what may be a period of economic uncertainty over the next several weeks.