U.S. President Donald Trump has delayed his new 25% tariffs on Mexican and Canadian exports to the United States for four weeks in his latest move in the North American trade war. The decision comes after days of uncertainty and turmoil, which has caused a plunge in stock indexes and strained relationships with the U.S.’s longtime allies and top trading partners.
Initially, Trump had announced that the tariffs would go into effect on March 5, but he later pushed the deadline back to April 2 after receiving a direct request from Mexican President Claudia Sheinbaum. In his executive orders, Trump stated that the tariffs would not be imposed on goods imported by U.S. companies from Mexico or Canada, as per the trade agreement reached in 2018 during his first term in office.
In a post on his social media platform, Truth Social, Trump explained that he had eased the tariffs as a sign of respect and accommodation for President Sheinbaum, with whom he has built a good relationship. He also praised Mexico’s efforts in curbing the flow of illegal migrants and the deadly opioid fentanyl into the United States, two issues that he had demanded action on from Mexico.
In a statement, President Sheinbaum expressed her gratitude for the positive relationship between the two countries and the results they have achieved through collaboration. She also mentioned that during a phone call with Trump, he initially wanted to keep the tariffs in place, but she was able to convince him with examples of Mexico’s recent achievements, such as limiting fentanyl flow and extraditing cartel operatives to the U.S.
The decision to delay the tariffs comes after Trump’s announcement on Wednesday to also pause the tariffs on vehicle imports from Mexico and Canada, following warnings from major U.S. automakers about the severe financial impact it would have on their businesses.
However, the market response to Trump’s back-and-forth actions has been negative, with the three major U.S. stock markets dropping again on Thursday. The Dow Jones Industrial Average was down by more than a percentage point, the S&P 500 dropped nearly 2%, and the tech-heavy NASDAQ plunged by almost 3%. These fluctuations have caused financial uncertainty and concern among investors.
Trump’s latest move has also been met with criticism from Canadian Prime Minister Justin Trudeau, who accused the U.S. of causing the trade war and using it for political gain. In response, Trump took to Truth Social to mock Trudeau and suggested that he was using the tariff issue to boost his chances of re-election as Prime Minister.
Before the announcement of the delay, Trudeau had stated that Canada would not back down from its retaliatory tariffs until the U.S. lifts its own unjustified tariffs on Canadian goods. He also mentioned that he expects the trade war to continue for some time, despite a recent phone call with Trump, which he described as “colorful but constructive.”
The trade war began on Tuesday when Trump imposed the 25% tariffs on Mexican and Canadian exports, along with doubling the 10% tax on Chinese products to 20%. In response, all three countries announced their own retaliatory tariffs on U.S. goods, causing a further increase in tensions.
Typically, tariffs are paid by importers, who then pass on the cost to consumers and businesses purchasing their products. As a result, these tariffs have the potential to harm not only the exporting countries but also American businesses and consumers.
Canada has already imposed retaliatory tariffs on American goods worth $21 billion, including items such as orange juice, peanut butter, and cosmetics. They plan to add a further $87 billion in tariffs on products such as electric vehicles, fruits and vegetables, and steel in the next three weeks.
During his speech to Congress on Tuesday, Trump defended his tariff stance, stating that it is aimed at bringing back manufacturing jobs to the U.S. and making the country “rich” and “great” again. He also acknowledged that there may be some disruptions but stated that they will be minimal.
The future of the tariffs on Mexico and Canada remains uncertain, with the pause set to end in a month. However, Trump’s decision to delay the tariffs is a positive step towards finding a diplomatic solution to the trade war. It is hoped that the two countries can continue to work together to find a mutually beneficial solution that will benefit both nations and their economies.
