We have good news, and good-ish news: full-bodied California reds are back on LCBO shelves, and President Donald Trump will delay tariffs on Canadian goods until March 1.
Driving the news: After a “pretty good call” with Prime Minister Justin Trudeau, the U.S. president agreed to delay imposing a 25% tariff on Canadian goods, along with a 10% tariff on energy exports, for at least one month as both sides search for common ground.
- Mexico, which faced similar tariffs, was also granted an extension after Mexican President Claudia Sheinbaum agreed to deploy 10,000 troops to the U.S. border.
Why it’s happening… likely because Trudeau pledged to reinforce security at Canada’s border and appoint a “fentanyl czar” to stop the flow of the drug into the U.S. A new $1.3 billion border plan will involve new choppers, technology, and 10,000 border personnel.
- Trump and his officials have positioned Canada as a freeloader that has not met military spending targets or done enough to stop the flow of fentanyl into the U.S.
- Canada will also pause plans for a 25% tariff on $30 billion worth of U.S. goods, which would have ramped up to cover $155 billion worth of goods on February 25.
Why it matters: The risks of a trade war are still very real. In a report published earlier this week, RBC economists warned that the tariffs that have been threatened by Trump could increase the risks of a recession and “wipe out Canadian growth for up to three years.”—SB