Trump pauses Canada, Mexico tariffs while China tariffs move forward
President Donald Trump has agreed to postpone imposing 25% tariffs on Canada and Mexico for 30 days, de-escalating tensions that had pushed the North American neighbors toward a potential trade war. The decision follows last-minute negotiations with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, both of whom committed to increasing border security measures.
The temporary reprieve comes as Canada and Mexico had been preparing retaliatory tariffs on American goods in response to Trump’s proposed trade measures. While the delay offers a short-term resolution, concerns remain over the long-term impact of the administration’s tariff strategy.
As part of the agreement, Trudeau pledged to enhance Canada’s border controls, specifically targeting migration and the flow of fentanyl a synthetic opioid that Trump has repeatedly cited as a significant issue for the United States. Canada has committed $1.3 billion CAD (£1bn) toward border security, which includes deploying nearly 10,000 frontline workers and increasing resources to curb the trafficking of fentanyl.
Much of Canada’s border security plan had already been announced in December, incorporating enhanced cooperation with U.S. law enforcement, increased information sharing, and the use of drones and Black Hawk helicopters for surveillance.
Meanwhile, Mexico has agreed to send 10,000 National Guard troops to reinforce its northern border with the U.S. In return, the U.S. will work to reduce the flow of firearms into Mexico an issue that has long contributed to crime and violence within the country. President Sheinbaum confirmed the arrangement in a social media post, emphasizing the importance of mutual respect and sovereignty in U.S.-Mexico relations.
While the Canada and Mexico agreements have temporarily eased tensions, the U.S. is moving ahead with a separate 10% tariff on Chinese imports, set to take effect at 00:01 EST (05:00 GMT) on Tuesday. Trump described the tariff as the “opening salvo” in negotiations with China, warning that further increases could follow if a trade deal is not reached. He also indicated that he planned to speak with Chinese President Xi Jinping in the coming days to discuss potential resolutions.
The announcement of the 30-day suspension led to a brief recovery in financial markets, which had seen declines earlier in the day amid uncertainty over trade policies. However, economic experts continue to warn that escalating trade disputes could drive up consumer prices on essential goods, including cars, steel, lumber, food, and alcohol.
Newfoundland and Labrador Premier Andrew Furey acknowledged the temporary relief but cautioned that the broader threat of tariffs remained.
Ontario Premier Doug Ford echoed these concerns, stating that while the delay was welcome, the risk of tariffs had not disappeared. He emphasized that Trump’s willingness to use tariffs as leverage meant that Canada must remain prepared for potential economic disruptions.
Looking beyond North America, Trump has signaled that the European Union (EU) could be the next target of U.S. tariffs, though he provided no specific details. He also suggested that the United Kingdom, which left the EU in 2020, might be spared from major trade penalties.
As the 30-day period unfolds, businesses and policymakers will closely monitor the evolving trade landscape, with many bracing for the possibility of renewed tensions once the temporary suspension expires.