Trudeau Bends The Knee: Canada Will Send 10,000 Troops To Border, Name Fentanyl Czar To Delay Trump Tariffs
Update (4:40pm ET): In what is a carbon copy of Trump’s tariff-delaying deal with Mexico, moments ago Canada’s outgoing PM, Justin Trudeau, said that he too had bent the knee, i.e. had a “good call” with Trump, and that US tariffs on Canada would be paused for 30 days after Canada – just like Mexico – agreed to send 10,000 troops to the border as part of a $1.3 billion border plan which “reinforces the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl”.
Trudeau also said that Canada will appoint a Fentanyl Czar, list cartels as terrorists, ensure 24/7 eyes on the border, and launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.
Finally, the Canadian PM also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million.
As a result of not only bending the knee but bending over fully for the US president, Trump’s proposed tariffs will be paused for at least 30 days.
Shortly after Trudeau’s post, Trump followed suit on his own Truth Social network, writing that Canada “has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of Americans, while destroying their families and communities all across our Country.”
Trump concluded by saying that he is “very pleased with this initial outcome” adding that the Tariffs announced on Saturday will be paused for a 30 day period “to see whether or not a final Economic deal with Canada can be structured. FAIRNESS FOR ALL!”
Trump has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of
Separately, the FT reported that all shipments arriving by mail from Canada and China will need to be cleared by customs from Tuesday onwards as the US moved to close a trade loophole that allowed low value imports to avoid duties.
“Without regard to their value, no mail shipments from China will be cleared or released” by the Customs and Border Protection agency “unless and until formal entry is properly filed”, the agency said in a document scheduled to be published in the Federal Register on February 5.
The CBP used the same language in a filing about tariffs on Canada, also scheduled to be published on Wednesday.
Details on the CBP’s order requiring “formal entry” for shipments from Canada and China follows US President Donald Trump issuing executive actions imposing tariffs on goods from those countries.
Trump’s executive orders stated that the articles applicable for tariffs would not be exempt from the so-called “de minimis exemption”, which allows low value imports to avoid duties.
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Tl;dr: VP JD Vance summed it all up in one simple tweet:
“For three days a lot of the far left has actively rooted against America and argued we’d get nothing out of President Trunp’s demands that Mexico secure its country.
Well, how do you like them apples?”
Apples indeed! Now let’s see what Trudeau has to say later…
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Late last night we said that it is very likely Trump’s trade war would be very short, after we pointed to better than evern Polymarket odds that the trade war with both Mexico and Canada would be over in the next month or two.
And then, just hours later, this appears to have been validated after Mexico’s president Scheinbaum said that after having a good conversation with Trump, Mexico is “pausing tariffs for a month for now” and that Mexico will promptly comply with Trump’s ask by reinforning the northern border with 10,000 national guard members to “prevent drug trafficking from Mexico to the US, particularly fentanyl.”
Here is a translation of what she said:
We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements:
1. Mexico will immediately reinforce the northern border with 10,000 members of the National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl.
2. The United States is committed to working to prevent the trafficking of high-powered weapons to Mexico.
3. Our teams will begin working today on two fronts: security and trade.
4. They are pausing tariffs for one month from now.
President Trump has confirmed the tariffs are paused for one month:
The Canadians were very busy scouring the Government’s tariffs site…
And now that trade war with Mexico appears to be over, Trump just has to repeat the same with Canada when he speaks to Trudeau at 3pm ET today.
As for China, we doubt that particular trade war will be as easy to win but who knows: Trump is certainly on a roll.
In any case, the market is certainly delighted with the outcome, and the Mexican peso is surging…
TSY yields are rising (shouldn’t they fall on non-inflationary, non-tariffs?)…
Oil prices have plunged, erasing overnight tariff-driven gains…
Bitcoin is ripping higher (as we suppose this means no large drop in global liquidity?)
And US equities are reversing the large losses overnight quite rapidly…
Now, what will the MSM say after doom-mongering all morning about Trump’s ‘catastrophic’ tariffs?
