Canada could avoid U.S. tariffs for now with border action: Trump’s commerce pick

U.S. President Trump's Commerce Secretary nominee Howard Lutnick signaled the way to avoid tariffs may be through border action. Rachel Aiello explains.

With the threat of a Feb. 1 tariff imposition looming, U.S. President Donald Trump’s pick to lead the Commerce Department says Canada could avoid tariffs in the short term if the government addresses border concerns – and those sentiments are being echoed by Newfoundland and Labrador Premier Andrew Furey.

Detailing a broader tariff plan with a potential second round of tariffs in the spring, Howard Lutnick said Wednesday that the first phase is tied to the border and could be avoided, if Canada addresses illegal migration and fentanyl at the border.

“It is not a tariff, per se. It is an action of domestic policy. Shut your border and stop allowing fentanyl into our country, killing our people,” Lutnick said at his confirmation hearing before the U.S. Senate.

“So, this is a separate tariff to create action from Mexico and action from Canada. And as far as I know, they are acting swiftly, and if they execute it, there will be no tariff.”

Lutnick’s testimony provides the latest insight into what the Trump administration might have planned when it comes to how it intends to act on its various tariff threats.

In late November, Trump threatened to impose a 25 per cent tariff on all imports from Canada and Mexico on Day 1 of his second term. Trump initially used the flow of illegal migrants and drugs over the border as the rationale for imposing the steep tariffs, but later shifted his rhetoric to praising the use of tariffs on their own merit.

In response, the federal government unveiled a $1.3-billion border plan, which includes a new aerial task force for surveillance between ports of entry and additional human resources. But so far, Ottawa has received no assurances from the Trump administration that its border plan is enough to avoid tariffs.

Speaking to reporters on Wednesday, Public Safety Minister David McGuinty highlighted actions that are being taken at the border, saying he’s “quite convinced that the evidence that’s being presented to the administration will break through.”

“I think we should take Mr. Lutnick’s comments seriously. I think we should take them at face value, and I think we should continue reminding our American neighbours how far we’ve come and Canadians how far we’ve come,” McGuinty said.

The public safety minister will be heading to Washington later this week to meet with U.S. officials.

Trump administration eyeing broader tariffs in the spring

In his testimony on Wednesday, Lutnick signalled a broader range of tariffs – or what he called “the big tariff view” – could be coming following Trump’s ordered study into alleged unfair trade practices due April 1.

“We are going to study the actions and the economy of America and how it works. But if you think about it, we need to grow domestic manufacturing,” later adding “I think a thoughtful tariff policy that drives domestic manufacturing. I think it’s fundamental to the American workers.”

Lutnick also said he prefers “across the board” tariffs on a country-by-country basis.

“We need to be treated better. We need to be treated with respect, and we can use tariffs to create reciprocity, fairness and respect,” Lutnick said.

Speaking less than 24 hours prior to Lutnick’s hearing, White House Press Secretary Karoline Leavitt told reporters that Trump’s plan to slap 25 per cent tariffs on Canada on Feb. 1 date is “still on the books.”

Furey says PM conveyed tariffs could be avoided

Prime Minister Justin Trudeau met virtually with premiers on Wednesday to discuss the Canada-U.S. relationship.

Speaking to CTV Power Play host Vassy Kapelos after the meeting, Furey says the prime minister conveyed tariffs could be avoided in the immediacy.

“The (tariff threat) in February seems to be tied to actions on our borders, and we were led to believe that if appropriate actions were taken then the tariffs could be avoided on February 1,” Furey said.

Furey also said Canada should “be protecting borders” because “it’s important for Canadians.”

“We should be doing this for the maple leaf and not for the stars and stripes,” Furey said. “So, if it gives (Trump) the so-called win, fine to preclude tariffs in the immediate term. But this is an important measure for Canadians.”

Alberta Premier Danielle Smith said she believes addressing the border is “the most important first step” following discussions she has had with U.S. officials.

“Today, I reiterated this to the premiers, Minister LeBlanc, Minister Wilkinson and Prime Minister Trudeau, and I hope it is acted on by the end of this week before February 1,” Smith told reporters on Wednesday.

Foreign Affairs Minister calls meeting with U.S. counterpart ‘positive’

Foreign Affairs Minister Melanie Joly was in Washington to meet with new U.S. Secretary of State Marco Rubio, in which the border and trade were major focal points of the discussion.

Speaking to the media after the meeting, Joly said she “made clear” to Rubio that Canada would retaliate should the U.S. impose tariffs, also characterizing the meeting as “very positive.”

Asked whether Rubio gave her any clarity on how Canada can avoid tariffs, Joly did not answer directly, saying “my job ultimately is to make sure that we address the two issues that President Trump has raised, which is first and foremost, the border and fentanyl.”

Canadian officials have continued to emphasize that less than one per cent of the fentanyl in the U.S. comes from Canada.

When asked explicitly if Rubio could definitively say if tariffs are coming on Saturday, Joly said “the ultimate decision maker is President Trump,” adding she is “cautiously optimistic.”

Canada has a three-round retaliation planned, according to a senior government source, which would start by singling out a small list of American-made consumer products such as Kentucky bourbon and Florida orange juice.

This targeting would be followed by tariffs on a longer list of U.S. goods worth $37 billion, and then if needed, Canada would hit an additional $110 billion in manufacturing and other products with trade action.

Joly will be in Washington until Friday to continue talks with Trump officials.

With files from CTV News' Rachel Aiello