A senior U.S. official may have unintentionally stirred the pot during an already chaotic day in Washington, D.C., when he mistakenly indicated that Canada would be slapped with a 10 per cent tariff—contradicting earlier White House assurances. The confusion added a new layer of tension to an ongoing tariff saga that’s left North American trade partners and financial markets reeling.
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Tariff Turbulence in Washington
It all began with President Donald Trump’s recent announcement of sweeping global tariffs, aimed primarily at countries with trade imbalances with the United States. A flat 10 per cent “baseline” tariff was set to take effect Wednesday, with Canada and Mexico originally excluded from the policy.
But during a press briefing, U.S. Treasury Secretary Scott Bessent caused a stir by affirming—perhaps in error—that the 10 per cent levy would indeed apply to America’s closest North American allies. Asked point-blank whether the baseline rate extended to Canada and Mexico, Bessent simply replied, “yes.”
The comment quickly sent shockwaves through diplomatic circles and media outlets. It also appeared to contradict Trump’s own earlier announcement that Canada and Mexico were exempt from the initial round of tariffs.
White House Walks Back the Statement
Shortly after the briefing, a senior official clarified to CBC News that Bessent’s statement might not have been accurate. A White House source, speaking on background, confirmed that while some tariffs remain, the baseline 10 per cent tariff does not apply to Canada and Mexico.
Still, the brief moment of confusion left leaders scrambling. Canadian Minister of International Trade Dominic LeBlanc reportedly reached out to U.S. Commerce Secretary Howard Lutnick in an urgent effort to confirm Canada’s exemption status.
Canada Warned Against Retaliation
Despite the walk-back, the U.S. administration issued a sharp warning. Commerce Secretary Lutnick advised Canada against any retaliatory moves, pointing to the consequences faced by China. Beijing was hit with a staggering 125 per cent tariff after it responded to U.S. tariffs with an 84 per cent levy of its own.
“If Canada decides to keep their retaliatory move, which I would suggest — having watched how it went with China — it would be a really, really bad choice,” Lutnick cautioned.
The warning comes amid a tense backdrop: Canada has already imposed billions of dollars in counter-tariffs targeting key U.S. sectors, including a 25 per cent duty on steel, aluminum, and car parts that lack U.S. content.
Lutnick, meanwhile, praised Mexico’s more “restrained” reaction, hinting at a preferred model of compliance.
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Political Fallout in Canada
Prime Minister Mark Carney welcomed the temporary tariff pause as a “relief,” especially after having personally spoken to Trump to schedule post-election trade talks.
“Canada must continue to deepen its relationships with trading partners that share our values, including the free and open exchange of goods, services, and ideas,” Carney posted on X (formerly Twitter).
Still, on the campaign trail, he remained firm that counter-tariffs remain a key part of Canada’s strategy: “We’ll fight Americans with what they understand — money,” Carney said in Saskatoon, stressing that Canadian countermeasures are designed for maximum impact on the U.S. and minimal fallout at home.
Opposition leaders quickly seized on the moment.
Conservative Leader Pierre Poilievre labeled the existing tariffs as “unjustified” and blamed Carney for failing to negotiate their removal. “Carney is running his entire campaign on a false promise that he can control the president… Nobody can control this president,” he quipped in Brampton.
NDP Leader Jagmeet Singh, speaking from Vancouver International Airport, said Canadians were “fed up” with Trump’s trade flip-flops.
“We’re going through chaos created by Donald Trump,” Singh said. “The only way off this roller-coaster is to invest in Canadian-made products and reduce our reliance on the U.S.”
Market Reaction & Global Concerns
The financial world has been watching nervously. Stock markets tumbled after Trump’s original tariff announcement, triggering fears of a global recession. However, they saw a bounce-back after Wednesday’s news of a 90-day pause on some tariffs and confirmation that Canada had avoided the harshest measures—at least for now.
Economists remain wary. While Trump’s pivot offered momentary relief, the uncertainty surrounding U.S. trade policy continues to cast a long shadow over global economic stability.