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Canadian politicians, business leaders and general consumers fearing an onslaught of new trade tariffs by U.S. President Donald Trump following his inauguration today can breathe a little easier, at least for the time being.
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Ahead of his inauguration Monday, a presidential memo sent to U.S. federal agencies instructs them to re-examine trade policies and re-evaluate relationships with Canada, Mexico and China but doesn’t call for any immediate executive orders to enact new economic measures.
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As reported by the Wall Street Journal and the New York Times, Trump aims to identify and fix what he feels are ongoing trade deficits — when a country is exporting more to the U.S. than they’re importing — and policies that benefit other nations over the U.S.
The memo specifically mentions the U.S.-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement in 2020 and is up for review in 2026.
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The incoming president has previously stated he wants its two biggest trading partners to tighten up on China’s role in their respective economies, focusing his attention on the auto sector.
The agencies will “now assess the impact of the USMCA on American workers and businesses and make recommendations regarding America’s participation in it,” the memo’s summary read, per the Wall Street Journal.
In terms of Canada, since being elected, Trump has claimed the U.S. subsidizes its northern neighbour by $200 billion annually through the trade deficit, military protection, and other measures.
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He threatened a 25 per cent tariff on Canadian goods upon his Jan. 20 inauguration, resulting in Canada’s federal and provincial governments responding with promises of economic measures of their own should it come to pass.
Meanwhile, Trump has spoken about a 60 per cent tariff on some imported Chinese goods, and the memo mentions the Phase One trade deal signed between the two nations in 2020.
It also circles back on Trump’s first-term concern about China and Vietnam’s alleged currency manipulation, and requests agencies begin exploring the possibility of his proposed “External Revenue Service,” a new federal arm to collect new tariff revenue.
A senior Trump policy adviser who spoke to the Wall Street Journal said the memo was the new head of state’s “measured way” of approaching his trade agenda and any executive order he may later issue.
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