U.S. President Donald Trump delayed for a month his plan to impose tariffs on Mexico. This came after Mexican President Claudia Sheinbaum’s decision to move 10,000 national guard troops to the border to curb drug smuggling.
Tariffs that would hit Canada and China were still poised to begin on Tuesday. But uncertainty loomed, as people wondered whether the trade deals would hold or whether a larger trade war was in the works. Trump had warned that additional tariffs might be imposed.
A Canadian official told reporters that Canada had not been afforded the same kind of blanket exemption from the tariffs, as Mexico had, and could not be certain it could escape them. The official, who spoke on the condition of anonymity, noted that Canada had the impression that the U.S. was making different requirements from those it asked of Mexico.
Responding to a question about what Canada could do to end the tariffs, Trump said, “I don’t know.” He also cautioned: If the United States could not reach a deal with China, the tariffs would be “very, very high.”
Tariff Truce to Follow Talks With Mexico
After what Trump described as a “very friendly conversation,” Trump and Sheinbaum agreed to postpone the tariffs. He added that he looked forward to further discussions.
U.S. Secretary of State Marco Rubio, Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick would have to lead the discussions with high-ranking Mexican officials.
Sheinbaum said that Mexico would reinforce its northern border with 10,000 National Guard troops in order to halt drug trafficking, especially fentanyl. She also said the United States had agreed to work on preventing the smuggling of powerful weapons into Mexico.
Trump later said on social media that he spoke with Canadian Prime Minister Justin Trudeau and would speak with him again at 3 p.m. Canada and Mexico each planned to impose their own retaliatory tariffs, but Mexico held off.
Trump complained about Canada, saying it had not played ball despite years of working together. He also said that Canada does not permit U.S. banks to operate there and described the trade status as a “drug war.”
Economic Concerns and Market Reactions
Financial markets and companies were bracing for the new tariffs. Stock markets fell slightly, indicating that some were skeptical the tariffs would last. But there remained much uncertainty.
Trump said Sunday the tariffs would be lifted “when we can make a deal” — the implications being that they would come off if Canada and Mexico did more to stop the flow of illegal immigration and fentanyl. He didn’t articulate clear ground rules for what they had to do.
You have a 25% tariff on Mexico. Canada would also establish a 25% tariff on most goods in 2025, as well as a 10% tariff on energy products. China would incur a 10 percent tariff as well, for its part in the creation and sale of fentanyl, the White House said.
Debate Over Tariffs
But the White House economic adviser Kevin Hassett said it was a mistake to characterize this as a trade war. “This is a drug war,” he added.
While Trump did mention the desire to bring drugs to the U.S., he also argued that a needed solution to trade problems was tariffs. He had pledged to keep inflation under control, but he acknowledged that Americans could experience some economic pain in the near term.
