MEXICO CITY/WASHINGTON/OTTAWA. U.S. President Donald Trump has temporarily suspended his threat of imposing steep tariffs on Mexico and Canada, agreeing to a 30-day pause in exchange for new commitments from both countries on border enforcement and crime control. However, U.S. tariffs on China are still scheduled to go into effect as planned.
The agreement came after discussions with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, both of whom pledged to enhance efforts to tackle immigration and drug smuggling, addressing Trump’s demands. This pause, which delays a 25% tariff set to take effect on Tuesday, allows for a one-month negotiation period.
In the deal, Canada has agreed to deploy additional technology and personnel along its border with the U.S. and work with the U.S. to combat organized crime, fentanyl smuggling, and money laundering. Mexico, in turn, will send 10,000 National Guard members to reinforce its northern border to curb illegal migration and drug trafficking. Additionally, the U.S. has committed to preventing the trafficking of high-powered weapons into Mexico, according to President Sheinbaum.
“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 in a social media post following the agreement.
The agreements temporarily avert the risk of a trade war that could have severely impacted the economies of the U.S., Canada, and Mexico, with experts predicting rising prices for consumers. Trump also indicated his intent to pursue further economic agreements with the two countries over the next month, given their closely integrated economies due to the free-trade agreement signed in the 1990s.
China Tariffs Still Set to Begin
Unlike the pause with Mexico and Canada, no such deal has been reached with China. Tariffs of 10% on Chinese goods are still set to take effect at 12:01 a.m. ET on Tuesday (0501 GMT). Trump has warned of additional tariffs on China if progress is not made on addressing fentanyl trafficking.
“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” Trump stated.
China has responded, calling fentanyl a problem for the U.S., and has indicated it will challenge the tariffs at the World Trade Organization, though it remains open to negotiations.
The temporary tariff pause sparked a positive reaction in the financial markets, with the Canadian dollar soaring and U.S. stock index futures seeing a boost after recent losses on Wall Street. Industry groups also welcomed the delay, with Chris Davison, head of a Canadian canola producers’ trade group, stating, “That’s very encouraging news. We have a highly integrated industry that benefits both countries.”
Trump suggested that the European Union could be next in line for tariffs, though he did not specify when. EU leaders have indicated they are prepared to fight back but emphasized the importance of negotiations, given the EU’s significant trade ties with the U.S.
Trump acknowledged that while his tariffs could cause short-term difficulties for U.S. consumers, they are necessary to address immigration and narcotics trafficking and stimulate domestic industries. The originally planned tariffs would have covered nearly half of all U.S. imports, a move that analysts say would require significant increases in U.S. manufacturing, an unfeasible task in the short term. Others warned that the tariffs could push Canada and Mexico into recession and lead to “stagflation” — high inflation, stagnant growth, and high unemployment — in the U.S.
