Tariffs on Canada and Mexico, initially set for March 4, have been postponed to April 2 by Trump. He made this announcement after a cabinet meeting at the White House.

Despite earlier statements affirming the tariffs would proceed, he later indicated they would not take effect until the new date. The proposed 25% reciprocal tariffs are not likely to impact Canada and Mexico significantly, as most trade is already tariff-free.

Market reactions remained muted, with the USD/CAD exchange rate only declining slightly. Trump’s comments also showed inconsistencies regarding conditions related to fentanyl and tariff implementation.

Delaying the tariffs by nearly a month gives businesses more time to adjust, but it also introduces a level of market uncertainty. Short-term traders must pay close attention to any shifts in messaging, particularly as Trump’s previous statements on tariffs have changed without much warning. If anything, this suggests that further revisions to the timeline are not out of the question.

For those of us monitoring the USD/CAD movements, the limited reaction indicates that markets had largely priced in these tariffs—or at least the ongoing threats of them. The minor decline in the currency pair highlights the extent to which broader factors, such as interest rate expectations and economic data, still carry more weight than policy shifts that have been flagged well in advance.

However, attention should not drift too far from the inconsistencies in his messaging. Specifically, linking fentanyl policy to trade restrictions creates an unpredictable element. Any abrupt connection between unrelated policies can mean sudden volatility. If further comments emerge tying drug enforcement to tariff decisions, expect knee-jerk reactions, especially in short-term trading strategies.

April 2 now serves as the next key date, though previous experience suggests that traders should remain flexible. If another extension is announced—or if exemptions are widened—then any expectation of certainty would be misplaced. Instead, keeping a close watch on official statements and any policy leaks will be essential in determining positioning ahead of time.

From our perspective, the best course of action involves staying responsive rather than assuming decisions will hold firm. Given the administration’s history of shifting timelines, no one should be caught off guard by further adjustments. It’s not about assuming that changes will happen, but rather about preparing for every possibility.

Ultimately, the current muted response should not lead to complacency. The real impact, if any, will depend on whether further trade barriers emerge or if the timeline holds this time. Either way, volatility remains a possibility, and being ready for unexpected developments will be key for those navigating these markets.