Trump postpones tariffs on Mexico, Canada prepares for trade war

Trump Postpones Tariffs On Mexico Canada Prepares For Trade War

U.S. President Donald Trump has announced a temporary suspension of the 25% tariffs on Mexican exports that fall under the United States-Mexico-Canada Agreement (USMCA) until April 2. However, despite expectations set by U.S. Commerce Secretary Howard Lutnick, no official exemption has been granted to Canadian goods, keeping trade tensions high.

Trump took to Truth Social to confirm the decision, stating, “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA Agreement. This agreement is in effect until April 2nd.”

Mexico Welcomes Tariff Suspension Amid Trade Uncertainty

Mexican President Claudia Sheinbaum welcomed the temporary relief, calling her conversation with Trump “excellent and respectful.” In a press conference, she reassured that Mexico remains committed to addressing U.S. concerns on security and migration.

Sheinbaum also emphasized that most Mexican exports to the U.S. already comply with USMCA regulations. Additionally, she reaffirmed Mexico’s cooperation with the U.S. on two key issues:

  • Curbing the flow of fentanyl into the United States.
  • Limiting the smuggling of firearms from the U.S. into Mexico.

The move to delay tariffs provides temporary relief for Mexican exporters, but trade analysts warn that the April 2 deadline could bring fresh economic challenges if no long-term resolution is reached.

Uncertainty Over Canada’s Status Sparks Trade Concerns

Unlike Mexico, Canada has not received an exemption from the tariffs, despite earlier statements from U.S. Commerce Secretary Howard Lutnick suggesting an extension of relief to all USMCA-compliant goods.

Lutnick told CNBC, “I expect Trump to announce that all products compliant with USMCA will receive a tariff exemption. If you followed the agreement, you will get a reprieve. If you went outside of it, you did so at your own risk.”

However, Trump’s official statement made no mention of Canada. This omission has raised concerns among Canadian officials, including Prime Minister Justin Trudeau, who responded cautiously, stating:

“Commerce Secretary Lutnick’s comments are promising and align with some of our discussions with U.S. officials. However, we will wait for an official agreement before making any decisions. Until then, Canadian tariffs will remain in place.”

What Happens After April 2?

According to Commerce Secretary Lutnick, the tariff suspension is temporary and serves as a grace period for Mexico and Canada to demonstrate progress on fentanyl and trade enforcement before the U.S. implements reciprocal tariffs on April 2.

“If Mexico and Canada address fentanyl concerns effectively, this discussion will be over. If not, tariffs will stay in place,” Lutnick warned.

Despite the temporary suspension, Trudeau signaled that Canada expects prolonged trade disputes with the U.S., telling reporters in Ottawa:

“We are preparing for a long-term trade war initiated by the U.S. Our response will remain firm.”

As the April 2 deadline approaches, businesses and policymakers in North America’s top trading economies—Mexico and Canada—will be watching closely for Trump’s next move in the ongoing tariff battle.

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