U.S. President Donald Trump has once again made headlines with his latest decision to delay imposing new tariffs on Mexican and Canadian exports to the United States for four weeks. This move is the latest development in a North American trade war that has caused uncertainty and financial turmoil in the stock market, and strained relations between the U.S. and its long-standing allies and top trading partners.
Trump initially announced the 25% tariffs on Mexican imports would be delayed until April 2 after a direct conversation with Mexican President Claudia Sheinbaum. He was pleased to hear that the Mexican government had taken steps to reduce the flow of migrants and the dangerous opioid fentanyl into the U.S., both of which were demands made by Trump. Hours later, he also decided to pause the new tariffs on Canada, although it is unclear what will happen to them after the four-week period.
The decision came after Trump heard from the three biggest U.S. automakers about the severe financial impact these tariffs would have on their business. However, despite the president’s efforts to maintain a positive outlook, investors were not convinced and engaged in a broad sell-off, causing the three major U.S. stock markets to drop again – with the Dow Jones Industrial Average down by more than a percent, the S&P 500 off by nearly 2%, and the tech-heavy NASDAQ plunging by almost 3%.
In his executive orders, Trump stated that the tariffs will not be imposed on Mexican or Canadian goods imported by U.S. companies that fall under the trade agreement reached between the three countries in 2018 during his first term in the White House. Trump also expressed his gratitude towards President Sheinbaum on his Truth Social social media platform, saying that he has eased the tariffs as a gesture of accommodation and respect. He also praised their working relationship and their joint efforts in securing the border and fighting against illegal immigration and drug trafficking.
Sheinbaum, in a statement, acknowledged their unprecedented results in working together and respecting each other’s sovereignty. She also revealed that during a phone call with Trump, he initially wanted the tariffs to continue. However, she was able to convince him by providing evidence of the progress made by Mexico in the past month, such as limiting the flow of fentanyl and extraditing 29 top cartel members wanted by the U.S. She also mentioned the deployment of 10,000 troops to the northern border to prevent the entry of illegal immigrants and drugs into the U.S.
“This deal benefits both nations, and I am grateful to President Trump for his cooperation and hard work,” said Sheinbaum at a news conference. However, it remains uncertain what will happen next month when the tariff pause ends. Sheinbaum had previously threatened retaliatory tariffs against U.S. exports to Mexico, but unlike Canadian Prime Minister Justin Trudeau, she held off on implementing them in pursuit of a diplomatic solution.
Trump also took a jab at Trudeau, accusing him of having political motivations for criticizing the new tariffs. On his Truth Social platform, he said, “Despite the terrible job he’s done for Canada, I think Justin Trudeau is using the tariff problem to run for Prime Minister again. So much fun to watch!” However, Trudeau welcomed the pause in tariffs but reiterated that Canada would not back down on its retaliatory tariffs until the U.S. lifts its unjustified tariffs on Canadian goods.
The trade war among the North American countries was sparked by Trump’s decision to impose tariffs on their exports – 25% on Mexico and Canada, and 20% on China. Usually, the cost of tariffs is borne by the importers, who then pass on the burden to their consumers or businesses. In response, Mexico and Canada retaliated with their own tariffs on various American goods. Canada, for instance, has already imposed $21 billion worth of tariffs on products like orange juice, peanut butter, and cosmetics, among others. They have threatened to add another $87 billion in tariffs in three weeks on items such as fruits, dairy, and electronics.
In a recent address to the U.S. Congress, Trump maintained his stance on tariffs, saying they were focused on bringing back manufacturing plants to the U.S. and eliminating the need for tariffs altogether. “Tariffs are about making America rich again and making America great again,” he said. Although he acknowledged that there might be some disturbance in the short term, he reassured his audience that it would not have a significant impact.
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