Canada Follows Suit, Cuts Deal with US Before Deadline

UPDATE | Feb. 3, 2025 | 5:54 p.m. (EST)

NBC reported Monday afternoon that Canadian Prime Minister Justin Trudeau released a statement on social media stating that Canada would spend $1.3 billion on a plan to reinforce its border with new helicopters, technology and personnel, as well as additional resources to stop the flow of fentanyl.

Canada announced its $1.3 billion border and immigration investment at the end of last year.

President Donald Trump said in a Truth Social post that he would pause implementing planned tariffs on imports from Canada for at least 30 days. Trump said the pause is to see “whether or not a final economic deal with Canada can be structured,” according to the post.

The announcement followed a call with Trudeau on Monday.

Trudeau posted on X that in exchange for the tariff pause, Canada will invest heavily in border security, create a “Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering,” appoint a “Fentanyl Czar,” and join the U.S. in listing cartels as terrorist groups, Trudeau said.

“I have also signed a new intelligence directive on organized crime and fentanyl, and we will be backing it with $200 million,” the Canadian leader added.

CNN reported that Trump said that he was “very pleased with this initial outcome” and also outlined the border commitments made by Canada.

“Canada has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of Americans, while destroying their families and communities all across our Country.” Trump wrote in his post.

US and Mexico Cut Deal That Pauses Tariffs

UPDATE | Feb. 3, 2025 | 2:27 p.m. (EST)

President Donald Trump announced a one-month delay in implementing his new 25% tariffs on imports from Mexico following an agreement cut Monday morning by Mexico's president to deploy 10,000 soldiers to the U.S. border to combat drug trafficking from Mexico.

In a social media post, Trump said that during the pause, “we will have negotiations” on the tariffs “headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico.”

He also said “I look forward to participating in those negotiations” with Mexico President Claudia Sheinbaum “as we attempt to achieve a ‘deal’ between our two Countries.”

The announcement came two days after Trump slapped 25% tariffs on goods from Mexico and Canada and 10% on imported goods from China.

Over the weekend, Sheinbaum threatened retaliatory tariffs on goods imported from the United States and nontariff measures but had not disclosed the tariff rate.

U.S. stocks, which opened trading lower Monday, regained most of their losses on news of the pause in the tariffs on goods from Mexico by mid-day.

Both he and Sheinbaum stated that the Mexican National Guard troops she is deploying to the border with the U.S. will be tasked with stopping drug trafficking from Mexico, particularly the deadly opioid fentanyl.

Trump also wrote that the Mexican troops will aim to stop the flow “of migrants into our Country.”

Sheinbaum first disclosed the pause on the tariffs on Mexico in a post on the X social media site.

“We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements,” Sheinbaum wrote in the tweet, according to a translation from Spanish.

She also wrote, “The United States is committed to working to prevent the trafficking of high-powered weapons to Mexico.”

Trump had not mentioned a commitment to stem the flow of weapons in his Truth Social post about his conversation with Sheinbaum.

At a news conference Monday morning, Sheinbaum was asked whether the issue of migrants and deportations from the U.S. was addressed during her call with Trump.

“We will always support and defend them. Always,” Sheinbaum answered.

She also said Mexican officials in discussions with the U.S. State Department are “working hard to defend our Mexican brothers and sisters.”

President Donald Trump announced over the weekend that the United States would impose tariffs on all imports from Canada, Mexico, and China, effective Feb. 4, with a 25% tariff on goods from Canada and Mexico — excluding Canadian energy, taxed at 10% — and a 10% additional tariff on Chinese imports.

The president announced the plan under the auspice of demanding all three countries — which are America’s three largest trading partners — do more to staunch the flow of the toxic narcotic fentanyl coming into the United States.

"Trump has been clear about his desire to end the fentanyl crisis, and it's time for Mexico and Canada to join the fight as well,” an unidentified White House official told Business Insider. Trump has said a tariff on China would also help fight the fentanyl problem. 

The reactions were swift. In a joint stance against the U.S. levies, Canadian Prime Minister Justin Trudeau and Claudia Sheinbaum Pardo of Mexico decried the measures and expressed their intent to collaborate to oppose them. 

Reuters reported that shortly following Trump’s announcement, Canada announced a 25% tariff on $155 billion of U.S. goods. On Feb. 2, Mexican President Sheinbaum declared that Mexico would implement tariff and non-tariff countermeasures to defend its interests. 

Of course, the looming notion of tariffs has been part of American political and economic discourse for the past year; the trade measure had been an economic centerpiece of President Trump's re-election bid. 

The tariffs target a range of imported goods — including steel, aluminum, asphalt shingles, and other roofing essentials — to encourage domestic production. As Trump asserted, "These tariffs are necessary to protect Americans," a claim that echoes the administration's broader "America First" trade strategy. 

However, while the policy is framed as a tool for national security and economic revival, its immediate repercussions on cost structures and supply chains will likely be profound.

Several sectors of the U.S. economy have reacted vociferously, offering rebuke by a cross-section of businesses, trade groups, and economists who say the levies will ultimately be passed down to American consumers.

Roofing, Related Sectors Will Not Escape Uninjured

The immediate effect of these tariffs is an increase in the cost of essential materials used to manufacture roofing system products. A 25% tariff on Canadian and Mexican imports directly raises prices for steel and aluminum, which are integral to roofing components like metal panels and fasteners. Similarly, the 10% tariff on Chinese goods affects a range of roofing materials and tools sourced from China.

Manufacturers like Owens Corning, GAF, Carlisle, and countless other firms producing roofing materials domestically may experience increased production costs due to higher raw materials prices. Distributors and suppliers, including SRS, Beacon, and ABC Supply, will also be affected as they navigate the complexities of adjusting supply chains and pricing strategies in response to the tariffs.

Roofing contractors, both small businesses and large corporations, will suddenly face cost increases and the dilemma of absorbing the additional expenses or passing them on to consumers, potentially leading to higher roofing service prices. 

Increased material costs will likely lead to higher overall construction expenses, potentially slowing project timelines and reducing profit margins. The construction and homebuilding industries are closely linked to roofing and are thus susceptible to the ripple effects of these tariffs. 

According to Jacob Arends, a senior development associate with Origin Investments, approximately 46% of U.S. construction materials are sourced from these countries, and 35% to 50% of total construction costs are tied to finished materials such as lumber, HVAC, roofing, plumbing and other equipment. 

As the tariffs are inherently inflationary, Arends said it’s not unreasonable to anticipate material costs for construction projects could spike 7.5%, increasing total construction budgets by 3% to 4%. 

However, while the math points to rising costs due to tariffs, current market conditions may dampen the actual impact. 

"Tariffs unequivocally work towards pushing domestic lumber prices higher," noted Rajan Parajuli, an associate professor of forest economics at NC State University, in an analysis of the levies' impacts on construction materials. 

Industry Takes Stock

Despite the tariff policy being framed as a tool for national security and economic revival, its immediate repercussions on cost structures and supply chains could be profound.

While the National Roofing Contractors Association has yet to weigh in, other trade groups, including the National Association of Manufacturers, have already voiced concerns about the possible adverse effects on the manufacturing sector. 

"Tariffs could undermine the significant progress our industry has made, raising costs and stifling job creation," NAM President and CEO Jay Timmons said in a statement.

The National Retail Federation also expressed concerns, emphasizing the potential for increased consumer prices and releasing a statement summarizing a generally agreed-upon sentiment: "We are disappointed the administration has decided to impose tariffs that could drive up prices for American families." 

Economists are also expressing concerns. The Brookings Institution warned that the tariffs could result in broader economic challenges, such as slowed growth and increased inflation. Furthermore, an Atlantic Council analysis pointed out, "The tariffs will quickly undermine the economic growth and advancements in supply-chain security that were direct outcomes of the United States-Mexico-Canada Agreement (USMCA)." 

Tariff-driven cost increases will likely delay the start of new projects since energy prices directly impact the production, transportation and availability of key materials like asphalt, concrete, steel and plastics. These materials rely heavily on petroleum-based inputs and energy-intensive manufacturing processes. 

Rising energy prices may increase transportation costs, creating a ripple effect throughout the construction supply chain and with the tariffs taking effect in the day, ongoing projects are expected to encounter additional cost pressures. 

The Fentanyl Connection

Trump's tariff orders include clauses suspending the duty-free exemption for low-value shipments under $800, known as a "de minimis" exemption. This exemption is widely regarded as the loophole that allows the importation of fentanyl and its precursor chemicals into the United States. However, analysts have said that without a complete global elimination of the "de minimis" exemption, it remains uncertain how effective Trump's strategy will be in reducing the fentanyl influx.

Mexico’s president refuted U.S. allegations linking the Mexican government to criminal groups and suggested that the U.S. should address its internal drug issues, Reuters first reported. President Sheinbaum emphasized a preference for dialogue but stated that Mexico is compelled to defend its national interests. 

In both the short and long term, these measures will likely lead to immediate price shocks, supply‐chain disruptions, and the need for major strategic adaptations by contractors, manufacturers, and distributors.

Economic Implications and Trade Relations

On a macroeconomic level, the tariffs could contribute to a broader inflationary environment. The Budget Lab at Yale University estimates that these measures could cost the average American household "between $1,000 and $1,200 in lost purchasing power annually," a stark figure highlighting the direct impact on consumers. 

As material costs climb, construction budgets inflate, and rising costs ripple through to consumer prices in the housing market and beyond, trade relations are also taking a hit, creating an environment of prolonged economic uncertainty. 

As The Atlantic warned, "America First policies may ultimately result in 'America Alone.'"