Donald Trump pauses tariffs on Canada, Mexico; keeps pressure on China

Trudeau confirmed the postponement in a post on X, stating, "Proposed tariffs will be paused for at least 30 days while we work together."

US President Donald Trump, late on Monday night, announced a 30-day postponement of proposed tariffs on Canadian and Mexican imports following high-level discussions with leaders of both countries.

The tariffs, initially revealed over the weekend, included a 25 percent duty on all imports from Mexico and most goods from Canada, with a 10 percent carve-out on energy products. Additionally, a 10 percent tariff on Chinese goods remains under consideration, with Trump stating he would engage with Chinese officials soon.

The decision to delay tariffs came after Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum committed to bolstering border security with the United States.

Trudeau confirmed the postponement in a post on X, stating, "Proposed tariffs will be paused for at least 30 days while we work together."

Trump detailed the agreements in separate posts on Truth Social. "I just spoke with President Claudia Sheinbaum of Mexico. It was a very friendly conversation wherein she agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States," he wrote. The soldiers will focus on curbing the flow of fentanyl and illegal migrants.

Regarding Canada, Trump stated, "Canada has agreed to ensure we have a secure Northern Border and to finally end the deadly scourge of drugs like fentanyl that have been pouring into our country." However, as per a CNN report, Canada accounts for just 0.2 percent of fentanyl seizures at the US border.

In response to Trump’s demands, Trudeau announced Canada would implement its previously planned $1.3 billion border security initiative. The plan includes appointing a "fentanyl czar" and designating cartels as terrorist organisations.

The sweeping tariff announcements had triggered concerns among business leaders, economists, and even members of Trump’s own party. Markets reacted sharply, with the Dow dropping nearly 600 points at the opening bell. However, news of the pause and security agreements prompted a partial market recovery.

Trump, known for his pro-tariff stance, shrugged off the market’s volatility. When questioned about the Wall Street Journal's editorial, titled "The Dumbest Trade War in History," Trump responded, "Not only is it not dumb, you’re going to see every single one of those countries is dying to make a deal."

Trump indicated that high-level negotiations with Mexico will continue during the 30-day pause. "We further agreed to immediately pause the anticipated tariffs for a one-month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico," he said.

President Sheinbaum confirmed Mexico’s deployment of 10,000 National Guard troops to its northern border, aimed at reducing fentanyl smuggling and improving security. She underscored Mexico’s commitment to humanitarian cooperation while highlighting US efforts to curb the flow of high-powered weapons into Mexico.

However, Sheinbaum refuted Trump’s suggestion of cartel-government links, stating, "There is no way we would come to an agreement under those circumstances."

While the immediate risk of tariffs has been averted, the potential for renewed trade conflicts looms, with Trump signaling that further tariff actions could target other countries later this month.

The US is, however, moving forward with a 10 percent tariff on Chinese goods, set to begin at 12:01 a.m. ET on Tuesday (0501 GMT), as no agreement has been reached with Beijing. A White House spokesperson confirmed that Trump is not scheduled to speak with Chinese President Xi Jinping until later this week.

Trump also signaled the possibility of escalating tariffs on China. "China hopefully is going to stop sending us fentanyl, and if they're not, the tariffs are going to go substantially higher," he warned.

In response, China has dismissed the fentanyl issue as America's problem and announced plans to challenge the tariffs at the World Trade Organization. Beijing has also threatened additional countermeasures but indicated it remains open to further negotiations.