A second major development in the tariff political drama came late Monday as the United States and Canada reached an agreement to pause Donald Trump’s proposed trade levies “for at least 30 days.”

Canadian Prime Minister Justin Trudeau announced the deal on social media platform X following a phone call with Trump.

The tariff deal includes new border security commitments to combat fentanyl trafficking and organized crime, mirroring Trump's agreement with Mexican President Claudia Sheinbaum.

Canada Rolls Out $1.3 Billion Border Plan

Trudeau outlined a $1.3 billion border reinforcement initiative featuring:

• Deployment of nearly 10,000 frontline personnel equipped with new helicopters, surveillance technology and enhanced coordination with U.S. agencies.
• The appointment of a fentanyl Czar to spearhead drug interdiction efforts.
• Official designation of cartels as terrorist organizations to enable tougher enforcement measures.
• The creation of a Canada-U.S. Joint Strike Force targeting organized crime, fentanyl networks and money laundering.
• A $200 million intelligence directive to enhance monitoring and enforcement along the northern border.

“Proposed tariffs will be paused for at least 30 days while we work together,” the Canadian prime minister said.

Markets React: Canadian Dollar Rallies, Equities Gain

The tariff deal gave a reprieve Canadian assets that were battered by heightened uncertainty earlier Monday.

The Canadian dollar rallied, with the USD/CAD exchange rate dropping to 1.4391, down from 1.46 levels prior to the news.

Canadian equities also advanced in after-hours trading, with the iShares MSCI Canada Index Fund EWC rising over 1%.

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