The man President Donald Trump has chosen to oversee his tariff agenda says hitting Canada with 25 per cent across-the-board duties would be an emergency measure to achieve border security — and could be followed by more tariffs in the future.
During Wednesday's Senate hearing on his nomination to lead the U.S. Department of Commerce, billionaire financier Howard Lutnick said the plan to impose duties on Canada and Mexico is distinct from Trump's long-term tariff plans.
He said the threatened 25 per cent tariff is not a "tariff per se" but a type of domestic policy meant to force America's neighbours to take action at the borders.
"You know that the labs in Canada are run by Mexican cartels. This tariff model is simply to shut their borders … Respect America," Lutnick said Wednesday."If we are your biggest trading partner, show us the respect. Shut your border and end fentanyl coming into this country."
The number of people and drugs crossing illegally into the United States from Canada is minuscule compared to the volume crossing the United States' southern border.
Ottawa responded to Trump's initial threat with a $1.3 billion border security plan and some provinces have separately boosted border enforcement. But the president has since expanded his complaints about Canada far beyond border security.
Lutnick said that he believes Canada and Mexico are "acting swiftly" on border security "and if they execute it, there will be no tariff and if they don't, then there will be."
The White House press secretary said Tuesday that Trump was still considering implementing the tariffs on Saturday.
During Wednesday's confirmation hearing, Lutnick was asked about the possible impacts of the tariffs on manufacturing and automotive industries. His answer suggested that even if Canada avoids the threatened border-related duties, it could still face tariffs in the near future following a multi-agency study of trade practices and deficits ordered by Trump.
Trump signed an executive action that, among other things, directs the secretary of commerce and the secretary of homeland security to assess migration and fentanyl flows from Canada, Mexico and China, and to recommend "appropriate trade and national security measures to resolve that emergency."
It also instructs the U.S. trade representative to start consultations on the Canada-U.S.-Mexico Agreement.
Trump's executive action says that the report on trade with Canada is not due until April 1.
Lutnick said he prefers tariffs on entire countries, rather than on specific products. He said across-the-board tariffs "create reciprocity, fairness and respect."
"My way of thinking, and I’ve discussed this with the president, is country by country, macro. Let America make it more fair," Lutnick said. "We are treated horribly by the global trading environment. They all have higher tariffs, non-tariff trade barriers and subsidies. They treat us poorly."
Canadian officials remain focused on thwarting the immediate tariff threat. Foreign Affairs Minister Mélanie Joly was back in Washington, D.C., Wednesday to meet with U.S. Secretary of State Marco Rubio.
It's Joly’s fifth visit to the U.S. since last November's presidential election — part of her efforts to convince American lawmakers that imposing tariffs on Canada would run counter to both countries' interests.
While Joly said Monday that she still believes diplomacy can fend off Trump's plan, Ottawa is preparing for the president to make good on his tariff threat.
Prime Minister Justin Trudeau held a virtual meeting with premiers Wednesday. New Brunswick Premier Susan Holt said they discussed the impact of tariffs, supports for provinces and ways to diversify exports to reduce Canada's dependency on the United States.
Saskatchewan Premier Scott Moe said every leader across the country needs to be "focused on de-escalating the entire conversation around tariffs and really looking at the strength and the integration of the economy we have."
Speaking ahead of the meeting, Moe said he supports "very targeted tariffs and counter-tariffs that can change the hearts and minds of policymakers in the U.S."
Ottawa has prepared multiple options for retaliatory tariffs, depending on what Trump ultimately does. Trudeau has said repeatedly every option is on the table.
In his first official campaign event since dissolving the provincial legislature the day before, Ontario Progressive Conservative Leader Doug Ford pitched himself Wednesday as the best steward of Ontario's economy in the face of the unpredictable American president.
"This isn’t just about tariffs. The president has threatened economic force. He’s even floated the unthinkable — taking over Canadian territory," Ford said.
"Let me say this loud and clear — Canada is not for sale."
Ford has said the winter snap election is required to get a strong mandate to push back on Trump's threats. Opposition parties say Ford is trying to capitalize on good polling numbers.
Ford stuck to his justification Wednesday, saying duties are "a game to the president."
"He seeks to divide and conquer, whether he imposes tariffs next week, next month or waits another year or more," he said. "Trump’s threats are not going away."
— With files from Allison Jones in Toronto, Hina Alam in Fredericton and Lauren Krugel in Calgary
This report by The Canadian Press was first published Jan. 29, 2025.
