The trade conflict between the US and Canada continues to escalate: Canada remains firm on imposing retaliatory tariffs, while the US temporarily exempts USMCA goods.

As the trade conflict between the US and Canada continues to escalate, Canadian Prime Minister Trudeau has stated that the Canadian government is "discussing" the possibility of postponing the implementation of the second round of retaliatory tariffs against the US. However, he emphasized that Canada will not change its stance despite recent tariff exemptions granted by the Trump administration. "We will not pause our tariffs on Canada because of changes made by the US yesterday," Trudeau stated. "I have reiterated multiple times that we will not lift retaliatory tariffs unless the unreasonable tariffs imposed by the US on Canadian goods are removed." While Trudeau welcomed the possibility of the US expanding tariff exemptions, he bluntly stated, "We are in the midst of a trade conflict." On Thursday, the three major US stock indexes experienced a sharp drop at the opening, with the Nasdaq falling by 2% at one point. Meanwhile, US Commerce Secretary Howard Lutnick stated in an interview that the stock market fluctuations will not affect the Trump administration's tariff policy. "The President's focus is on the prosperity of the United States," Lutnick said. "Stock market fluctuations of half a percentage point are not the key factor in decision-making." He predicted that the US economy will continue to grow, interest rates may drop by 1% or more, and the stock market will experience explosive growth. However, the uncertainty in the market regarding the trade conflict remains a cause for concern. In recent times, the US stock market has experienced significant volatility, with investors feeling anxious about the trade tensions between the US and Canada, as well as the US and China. Analysts point out that tariff barriers could lead to rising costs for businesses and impact global supply chains, thereby weakening market confidence. Lutnick also revealed that the Trump administration may implement a temporary tariff exemption of one month for goods and services that comply with the US-Mexico-Canada Agreement (USMCA). Lutnick stated, "This may cover all goods and services that meet USMCA standards, which are part of the trade agreement reached by President Trump with Canada and Mexico, and are therefore likely to receive tariff exemptions." In response, Trudeau stated that Canada will continue to communicate with the US and strive to fully remove the 25% steel and aluminum tariffs. He emphasized, "Our goal remains to have all tariffs removed. Until then, we will take action to support Canadian businesses and people through difficult times." Furthermore, Trudeau revealed that he had a 50-minute phone conversation with Trump on Wednesday, reiterating Canada's position. He specifically refuted Trump's accusations about drugs flowing from Canada into the US, emphasizing that "our borders are secure, and less than 1% of the illegal fentanyl entering the US comes from Canada." At the same time, he once again warned that the tariffs imposed by the US will ultimately harm American workers and businesses. It is worth noting that foreign media, citing sources, reported that the tone of the conversation was tense and even involved "strong language and profanity." In response, Trudeau simply described it as a "colorful conversation." The latest data from the US Department of Commerce shows that since the Trump administration initiated the trade war, the US trade deficit has continued to widen. In January of this year, the US goods and services trade deficit reached $131.4 billion, hitting a historical high and far exceeding the market's expectations of $128.7 billion. Exports increased to $269.8 billion, but imports surged by 10% to $401.2 billion. Compared to the same period last year, the trade deficit skyrocketed by 96.5%, imports increased by 23.1%, while exports only grew by 4.1%. Analysts point out that this trend indicates that Trump's tariff policy has failed to effectively reduce the trade deficit and has instead exacerbated the imbalance in the US economy. Additionally, due to higher tariff costs, some production activities may further shift overseas, which in the long run may not be beneficial for the revival of the US manufacturing industry.