Trump retreats from global tariff plan, but Canada gets no relief

In a stunning about-face, U.S. President Donald Trump announced a 90-day suspension of his sweeping new “reciprocal” tariffs on most nations—but not on Canada.

While the steepest levies are now on hold for dozens of countries, a baseline 10% tariff will still apply to all nations, a White House official confirmed.

Canada, however, won’t see any relief. The 25% duties already in place on Canadian-made cars, steel and aluminum remain unchanged, even as Trump eases pressure on much of the world.

The move marks a dramatic shift after a week of fiery rhetoric from the U.S. president, who had vowed repeatedly not to back down. But with financial markets in free fall and global criticism mounting, Trump appeared to yield under pressure.

Speaking to reporters at the White House, he dismissed concerns that the policy reversal was a sign of weakness, saying the decision came after “people were jumping a little bit out of line.”

“They were getting yippy, you know,” he added. “A little bit yippy, a little bit afraid.”

Canada left out of tariff relief

While most countries will now be spared the full brunt of the U.S. trade war—for at least the next 90 days—Canada and Mexico are being left out.

The steep levies on autos and industrial goods from both countries remain in force, according to a White House spokesperson.

That puts Canadian exporters at a continued disadvantage and leaves domestic industries facing high costs and uncertainty. Ottawa has yet to secure an exemption, but it isn’t standing still.

Earlier Wednesday, the federal government announced it would expand its own retaliatory measures by imposing similar tariffs on vehicles imported from the United States. Unlike the U.S. duties, however, Canada’s response won’t target auto parts or vehicles originating from Mexico.

The continued penalties could reignite trade tensions between Ottawa and Washington, just as Canadian manufacturers were hoping for a reprieve.

Markets spooked, China hit harder

Trump’s sudden reversal came after days of market chaos, with U.S. stocks, oil prices and bond yields all tumbling.

Analysts say the timing of the 90-day delay suggests Trump may have been rattled by Wall Street’s reaction to the growing economic fallout from his trade moves.

But while much of the world got a reprieve, China is facing even steeper tariffs. The U.S. is now raising its duties on Chinese goods to a staggering 125%, escalating the trade war rather than stepping back. That move is likely to provoke further retaliation from Beijing and deepen the global economic uncertainty.

For Canada, however, the headline is simple: no change. Despite all the noise around Trump’s climbdown, Canadian exporters are still stuck under the same heavy tariffs they faced yesterday.

Global market reaction

Markets in Asia were among the first to respond to the tariff news. Stocks in Tokyo, Seoul and Hong Kong rose slightly, as investors welcomed Trump’s decision to ease up on most countries. But renewed tensions with China kept optimism in check, especially for companies that rely heavily on exports.

U.S. Treasury yields surged, with the 10-year briefly rising above 5% after Trump announced sharply higher tariffs on Chinese goods. Canadian bond yields also moved higher, driven in part by initial confusion over whether Canada would face new duties.

Yields had been tracking U.S. Treasuries earlier in the day, but spiked sharply after U.S. Treasury Secretary Scott Bessent suggested Canada and Mexico might be included in the blanket 10% tariff. That sent bond prices lower until a White House official later clarified that no additional duties were being imposed beyond those already in place.

Traders will be watching closely as North American markets reopen Thursday morning, with volatility expected to remain elevated as investors try to make sense of the evolving tariff situation and its potential impact on global growth.