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LATEST: Deal on ‘strike force’ against organized crime, money laundering prevents US- Canada trade war

DEAL: Agreement to set up a strike force to tackle cross border organized crime, fentanyl trafficking and money laundering help prevent a trade war between Canada and the US on Monday.

By AML Intelligence Correspondents

A Canada – U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering was key to avoiding a trade war between the two neighbours.

U.S. President Trump on Monday suspended his threat of 25% tariffs on Mexico and Canada at the last minute, agreeing to a 30-day pause in return for concessions on border and crime enforcement.

There was relief in Ottawa and Mexico City after both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement efforts in response to Trump’s demand to crack down on immigration and drug smuggling. That would pause 25% tariffs due to take effect on Tuesday for 30 days.

Canada agreed to deploy new technology and personnel along its border with the United States and launch cooperative efforts to fight organized crime, fentanyl smuggling and money laundering.

Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal migration and drugs.

Canada says it will invest $200-million more in fighting organized crime and drugs, with additional pledges to appoint a fentanyl czar and designate drug cartels as terrorists.

Under the terms of a deal struck by Prime Minister Justin Trudeau and Mr Trump, Canada also agreed to launch a new joint strike force to combat organized crime, and illegal production and distribution of the deadly opioid fentanyl.

In their conversations, the two leaders talked about Canada implementing its December, 2024, commitment of $1.3-billion over six years in new border security investments, reinforcing surveillance with new helicopters, technology and staff. “Nearly 10,000 frontline personnel are and will be working on protecting the border,” Mr. Trudeau said.

According to U.S. government figures, border guards intercepted 19.5 kilograms of fentanyl along the Canadian border last year, which is 0.2 per cent of the nearly 11 tonnes intercepted in the U.S.

“As President, it is my responsibility to ensure the safety of all Americans, and I am doing just that. I am very pleased with this initial outcome,” Trump said on social media.

On border issues, meanwhile, the 30-day tariff pause amounts to a test, said David Asher, a senior fellow at the Hudson Institute who has advised the U.S. Drug Enforcement Administration for more than two decades.

U.S law enforcement dislikes Canadian disclosure laws that make it difficult to keep sources confidential in court, frustrating proceedings against organized crime. Canada, too, has become a haven for senior figures in global money laundering, Mr. Asher told the Globe and Mail.

“The networks that reside in Canada are dominant,” he said. “They’re huge.”

For Canada, “it’s time to get past the lip service,” he said. “This is a time for action, not talk. And we’ll have 30 days to figure that out.”

Canadian industry groups, fearful of disrupted supply chains, welcomed the pause.

“That’s very encouraging news,” said Chris Davison, who heads a trade group of Canadian canola producers. “We have a highly integrated industry that benefits both countries.”

Trump suggested on Sunday the 27-nation European Union would be his next target, but did not say when.

EU leaders at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the U.S. imposes tariffs, but also called for reason and negotiation. The U.S. is the EU’s largest trade and investment partner.

Trump hinted that Britain, which left the EU in 2020, might be spared tariffs.

Trump acknowledged over the weekend that his tariffs could cause some short-term pain for U.S. consumers, but says they are needed to curb immigration and narcotics trafficking and spur domestic industries.

AML Intelligence
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