MICHEL MARTIN, HOST:
President Trump says the U.S. will delay an additional 50% tariff on about $20 billion worth of imports from Canada.
SACHA PFEIFFER, HOST:
He wrote on his social media site, Truth Social, that Canada and the U.S. had reached a deal to potentially restart construction on a controversial oil pipeline project. This last-minute agreement extends the tariff deadline by three days. But still uncertain is the fate of a broader trade agreement for all of North America. That is currently under review.
MARTIN: We have NPR's Emily Feng today to explain why. Good morning, Emily.
EMILY FENG, BYLINE: Hey. Good morning, Michel.
MARTIN: So, Emily, walk us through this. What are the tariffs that Trump has been threatening to impose, and why has he delayed them?
FENG: So the tariffs would've covered a real hodgepodge of goods - wine to hockey sticks to cement from Canada. Overall, it would cover about $20 billion worth of goods, which sounds like a lot. It is. But that's actually only about 5% of annual Canadian exports to the U.S. And these tariffs were part of a flurry of back-and-forth duties that were kicked off by the U.S. last year that has really strained relations with Canada.
Now, the deadline for these tariffs was supposed to kick in midnight last night. But with less than two hours to go before that deadline, Trump announced he was temporarily calling them off. And he wrote on Truth Social what was key behind this deal was the potential to restart the Keystone Pipeline. Remember that? It was a joint project between U.S. and Canadian companies to deliver oil from Canada to the U.S. But it got mired in an environmental controversy, and its permit was ultimately revoked by President Biden through an executive order.
Trump rolled back that executive order last year as part of his push to expand the U.S.' oil and gas sector. And now Canada's prime minister has put out a statement acknowledging the postponement of the tariffs, but only until this Friday. Neither country - neither the U.S. or Canada - has spelled out any details about the pipeline, and it's also unclear whether this postponement is enough to cool down real animosity in Canada against the U.S.
MARTIN: And say more about that, if you would. You know, describe that tension - the source of that tension.
FENG: So Canada is a historic partner of the U.S. It's a military ally, but President Trump has lobbed around rhetoric many Canadians find offensive. For example, comments like making Canada the 51st state of the U.S. or this month calling Canadian leaders, quote, "nasty." That's put pressure on Canadian leaders to stand up to the U.S., and polls this month show Canadians are overwhelmingly against appeasing the U.S. And as you mentioned, hanging in the balance is this sweeping free trade agreement between the U.S. and its two largest trading partners. That's Canada and Mexico, and that's up for renewal.
MARTIN: And tell more about the trade agreement.
FENG: It's called the USMCA - the United States-Mexico-Canada Agreement, very literal. It was signed during Trump's first term. But Trump has said he, quote, "doesn't care" about renewing this free trade agreement, even though it allows hundreds of billions of dollars of goods to trade pretty much duty-free through North America. For Canada, it's already seen the U.S. put tariffs on goods that were supposed to be duty-free under this agreement.
I talked about the USMCA's uncertain future with Philip Luck. He's the director of economic programs at the think tank Center for Strategic and International Studies in Washington.
PHILIP LUCK: If we are showing ourselves to not be very interested in upholding the tenets of the USMCA, it really raises the question of what's it worth to take on the sort of political pain of entering another agreement or making concessions if you don't get anything tangible out of it?
FENG: Trump has flip-flopped before on trade and security matters. But on economic matters, that uncertainty might also discourage businesses from investing in North America.
MARTIN: That is NPR's Emily Feng. Emily, thank you.
FENG: Thanks, Michel. Transcript provided by NPR, Copyright NPR.
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