Donald Trump has agreed to a 30-day pause on his tariff threats against Mexico and Canada as America’s two largest trading partners took steps to appease his concerns about border security and drug trafficking.
The pauses provide a cool-down period after a tumultuous few days that put North America on the cusp of a trade war that could have crushed economic growth, caused prices to soar and ended two of the United States’ most critical partnerships.
“I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for a 30-day period to see whether or not a final Economic deal with Canada can be structured,” Mr Trump posted on social media. “FAIRNESS FOR ALL!”
Canadian Prime Minister Justin Trudeau said on X that the pause would occur “while we work together”, saying that his government would name a fentanyl tsar, list Mexican cartels as terrorist groups and launch a “Canada-US Joint Strike Force to combat organised crime, fentanyl and money laundering”.
The pause followed a similar move with Mexico that allows for a period of negotiations over drug smuggling and illegal immigration.
The 10% tariff that Trump ordered on China is still set to go into effect as scheduled on Tuesday, though Mr Trump planned to talk with Chinese President Xi Jinping in the next few days.
China countered Mr Trump’s across-the-board tariffs on Chinese products with tariffs on select US imports on Tuesday.
China said it would implement a 15% tariff on coal and liquefied natural gas products as well as a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the U.S. The tariffs would take effect next Monday.
While the trade war feared by investors, companies and political leaders now seems less likely to erupt, that doesn’t mean the drama over Mr Trump’s tariff threats has ended.
Canada and Mexico bought some additional time, but Mr Trump could easily renew his tariffs and already plans to announce taxes on imports from the European Union.
All of that leaves the global economy uncertain about whether a crisis has been averted or if a possible catastrophe could still be coming in the weeks ahead.
Mr Trump on Saturday directed 25% tariffs on imports from Mexico and Canada, with another 10% tariff on Canadian oil, natural gas and electricity.
Mr Trump’s signing of tariff orders for the three nations set off alarms among investors, legislators, businesses and consumers. The taxes on imports, if sustained, could push up prices and sabotage growth, even as the president has suggested they are necessary to get other nations to stop illegal immigration, prevent fentanyl smuggling and treat the US, in his mind, with respect.
Mr Trump and Mexican President Claudia Sheinbaum announced the month-long pause on increased tariffs against one another after what the US leader described as a “very friendly conversation”, and he said he looked forward to the upcoming talks.
He said the talks would be headed by secretary of state Marco Rubio, secretary of treasury Scott Bessent, secretary of commerce nominee Howard Lutnick and high-level representatives of Mexico.
Ms Sheinbaum said she was reinforcing the border with 10,000 members of her country’s National Guard and that the US government would commit “to work to stop the trafficking of high-powered weapons to Mexico”.
In 2019, when Mexico’s government also avoided tariffs from Mr Trump’s administration, the government announced it would send 15,000 soldiers to its northern border.
But the outlook was different for Canada for much of Monday, only for an agreement to come together.
A senior Canadian official said the country was not confident it could avoid the tariffs as Mexico did, because Canada feels as if the Trump administration is shifting its requests of Canada more than it did for Mexico.
Asked on Monday afternoon what Canada could offer in talks to prevent tariffs, Mr Trump told reporters gathered in the Oval Office: “I don’t know.” He mused about trying to make Canada the 51st state of the US.
He also indicated that more import taxes could be coming against China: “If we can’t make a deal with China, then the tariffs will be very, very substantial.”
