President Donald Trump has agreed to temporarily suspend the imposition of 25% tariffs on Canada and Mexico for 30 days, averting a potential trade war with the North American neighbors. This decision came after last-minute phone calls with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum.
In exchange for the tariff pause, Trudeau committed to bolstering Canada’s border security to address migration issues and combat the flow of fentanyl. Similarly, Sheinbaum agreed to deploy troops to reinforce Mexico’s northern border in return for the United States limiting the influx of firearms into Mexico.
However, a 10% tariff on Chinese imports is still set to take effect at 00:01 EST (05:00 GMT) on Tuesday. Trump stated that he plans to speak with his Chinese counterpart soon and described the impending tariffs as the “opening salvo,” warning that they could escalate significantly if no agreement is reached.
The breakthrough with Canada and Mexico comes as both countries prepared for retaliatory measures against American goods. After their discussions, both leaders announced via social media that they had reached a temporary agreement to secure the border, allowing for at least a 30-day respite from tariffs.
Trump expressed satisfaction over the development, stating, “As president, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that.” Trudeau announced a $1.3 billion border security plan, which includes nearly 10,000 frontline workers dedicated to halting the flow of fentanyl, a potent synthetic drug.
The plan also features the appointment of a “fentanyl czar” and a joint strike force with the US to tackle crime and drug trafficking. Much of this initiative had been previously outlined by Canada in December, including increased coordination with US law enforcement and enhanced surveillance measures.
Earlier, Trump temporarily paused tariffs on Mexican goods after Sheinbaum confirmed that 10,000 National Guard troops would be sent to the US-Mexico border. She stated that her conversation with Trump was conducted with “great respect” for their nations’ relationship.
Historically, tariffs have been a prominent aspect of Trump’s strategy to bolster the US economy. However, economists caution that reciprocal tariffs can lead to higher prices for a variety of goods, affecting markets for cars, steel, food, and more.
The uncertainty surrounding these potential tariffs has already influenced stock market fluctuations, with items being removed from store shelves. Andrew Furey, the Premier of Newfoundland and Labrador, acknowledged the temporary relief provided by the 30-day pause but warned that a trade war remains a possibility.
Furey expressed hope for a peaceful resolution, saying, “We’re left as Canadians feeling a bit confused by this attack from our closest friend.” Ontario’s Premier Doug Ford also welcomed the tariff pause but highlighted the ongoing threat, affirming that Trump would likely continue to wield tariffs as leverage.
Trump hinted that the European Union could be the next target for tariffs, adding that Britain, having left the EU in 2020, might be spared from such duties.
Credit: BBC News