President Donald Trump on Monday 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.
Trump on Saturday had directed 25% tariffs on imports from Mexico and Canada, with another 10% tariff on Canadian oil, natural gas and electricity. He also ordered an additional 10% tax on imports from China.
All of the tariffs were scheduled to start at midnight Tuesday. Canada and Mexico threatened retaliation, raising the prospects of a broader regional trade war.
But on Monday morning that changed, with Mexico first folding.
Trump and Mexican President Claudia Sheinbaum announced the monthlong pause on increased tariffs against one another after what Trump described on social media as a “very friendly conversation,” and he said he looked forward to the upcoming talks.
“I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries,” the president said on social media.
Trump 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. Sheinbaum said she was reinforcing the border with 10,000 members of her country’s National Guard and that the U.S. government would commit “to work to stop the trafficking of high-powered weapons to Mexico.”
Later on Monday, Canada’s prime minister, Justin Trudeau, after speaking twice by telephone with Mr. Trump, said U.S. tariffs on his country’s goods would be postponed by 30 days as negotiations on a border deal took place.
After his call with Mr. Trudeau, Mr. Trump wrote in a social media post that he had agreed to the pause “to see whether or not a final Economic deal with Canada can be structured.” Mr. Trudeau, in his own social media post, described measures that were already being enacted under its $1.3 billion border plan, including the deployment of additional technology and personnel to “ensure 24/7 eyes on the border.” He said the two countries would also establish a joint strike force to combat organized crime, fentanyl and money laundering.
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One Response
1. Neither the Mexicans nor Canadians made any meaningful concessions. They both agreed to ban drug smuggling, which they have been doing all along. They simply agreed to continue to do what they were already doing. That is not a “win” – at best its a “draw”.
2. Most importantly, the Canadians did not agree to open their markets to American dairy or banking services. The Mexicans did not agree to importing stuff from China, or then sending into the US as if it were of Mexican origin. The Mexicans didn’t also agree to honor obligations to American companies doing business in Mexico. These would have been “wins” for Mexico.
3. My guess is Trump was in a state of panic when the stock markets started crashing on Sunday evening. He realized that a tariff on North American oil (and other energy forms) would not “punish” the Mexicans or Canadians, but would cause inflation in the United States. The same held true for timber (of the type used for construction) from Canada, and agricultural produce from Mexico. So Trump realized he would be blamed for crashing the stock market, hurting the profits of American companies and worst of all, raising domestic prices (“inflation” – the primary issue that undermined the Democrats in 2024), so he wisely surrendered, “declared victory” and withdrew from the battle. Much to his credit, Trump realized he goofed and changed directions to avoid hurting his core constituency.