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U.S. President Donald Trump on Thursday delayed for four weeks his new 25% tariffs on most Mexican and Canadian exports to the United States, his latest maneuver in a North American trade war that has plunged stock indexes for days and roiled U.S. relations with its longtime allies and two biggest trading partners.
Trump first delayed the tariffs on Mexican imports to the U.S. until April 2 after hearing directly from Mexican President Claudia Sheinbaum on how her government had helped curb the flow of migrants and the deadly opioid fentanyl into the United States — two demands made by Trump on the country’s southern neighbor.
Hours later, he also paused the new duties on Canada, although what happens to the tariffs in a month on either country is unknown. Trump’s latest actions came a day after he paused the tariffs on vehicle imports from the two countries after the three biggest U.S. automakers said the tariffs would have a severe financial impact on them.
But investors cast an early verdict on Trump’s days of whipsawing action, engaging in a broad sell-off because of the financial uncertainty. The three major U.S. stock markets dropped again on Thursday, with the blue-chip Dow Jones Industrial Average down by more than a percentage point, the broader S&P 500 off nearly 2%, and the tech-heavy NASDAQ plunging by almost 3%.
Trump said, in executive orders, that the tariffs will not be imposed on Mexican or Canadian goods imported by U.S. companies that fall under a trade agreement he reached with the two countries in 2018 during his first term in the White House.
In a post on his Truth Social social media platform, Trump said he eased the tariffs on Mexican goods “as an accommodation, and out of respect for, President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl.”
Trump ended the post by saying “Thank you to President Sheinbaum for your hard work and cooperation!”
In a statement on Thursday, Sheinbaum said “We agreed that our work and collaboration have yielded unprecedented results, within the framework of respect for our sovereignties.”
Later, at a news conference, she said that during a Thursday phone call, Trump at first wanted his tariffs to stay in place.
But Sheinbaum said she gave him examples of the results she had achieved in the past month, including how Mexico limited the flow of fentanyl into the U.S. and how Mexican authorities had sent 29 top cartel operatives wanted by American officials to the United States. She also dispatched 10,000 troops to Mexico’s northern border to try to halt the flow of migrants and drugs into the United States.
“Mexico was treated with a lot of respect, and we reached this deal that benefits both nations,” she said, although it remained unclear what might happen next month when the tariff pause ends.
Sheinbaum had threatened retaliatory tariffs against U.S. exports to Mexico, but unlike Canadian Prime Minister Justin Trudeau, had held off on announcing them as she pressed for a diplomatic solution.
Trump contended that Trudeau had political motivations for attacking his imposition of the new levy on Canada.
“Believe it or not, despite the terrible job he’s done for Canada, I think that Justin Trudeau is using the Tariff problem, which he has largely caused, in order to run again for Prime Minister.,” Trump said on Truth Social. “So much fun to watch!”
‘We will not be backing down’
Before Trump announced the pause in his tariffs on Canadian exports, Trudeau said he welcomed it, but nonetheless would keep his retaliatory tariffs in place for now.
The Canadian leader said he expects Canada and the U.S. to be in a trade war for the foreseeable future after having what he called a colorful but constructive call with Trump this week.
Trudeau said the two sides are “actively engaged in ongoing conversations in trying to make sure these tariffs don’t overly harm” certain business sectors and workers. He also reiterated that “we will not be backing down from our response tariffs until such a time as the unjustified American tariffs on Canadian goods are lifted.”
‘There will be a little disturbance’
Trump touched off the trade war Tuesday by imposing tariffs against Washington’s three biggest trading partners, the 25% levy on Mexican and Canadian exports, while doubling an earlier 10% tax on Chinese products, to 20%.
Typically, tariffs are paid to the U.S. government by importers, who then often pass on the cost of the duties to individual consumers or businesses buying their products or raw materials they need for their own operations.
After Trump imposed the tariffs, all three countries swiftly announced they would retaliate with their own extra duties on U.S. goods.
Canada’s initial $21 billion worth of retaliatory tariffs have been applied on items such as American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.
Ottawa plans a further $87 billion in tariffs in three weeks on American products such as electric vehicles, fruits and vegetables, dairy, beef, pork, electronics, steel and trucks.
In a speech Tuesday night to the U.S. Congress, Trump acknowledged the tariff turmoil, saying, “Tariffs are about making America rich again and making America great again. There will be a little disturbance, but we’re OK with that. It won’t be much.”
He has said his tariff stance is aimed at pushing manufacturers operating in other countries to move their plants to the U.S., where Trump said they would no longer face tariffs.
VOA.
