US president Donald Trump has pushed back tariffs on a wide range of goods from Mexico and Canada, despite the measures only being introduced by the White House at the start of this week.
As reported by Reuters, last night (6 March) Trump exempted all goods covered by the US-Mexico-Canada Agreement (USMCA) from the tariffs. The USMCA was signed during Trump’s first term in office.
Mexico talks
The suspension will last for at least a month, expiring 2 April, a date on which Trump is set to implement a programme of ‘reciprocal’ tariffs on all nations trading with the US. It follows their imposition on Tuesday (4 March).
Trump wrote on his Truth Social platform that, after discussions with Mexican president Claudia Sheinbaum, “as an accommodation, and out of respect for” his counterpart, the tariffs would be paused.
He said “we are working hard, together, on the border, both in terms of stopping illegal aliens from entering the US and, likewise, stopping [the traffic of] fentanyl”.
Sheinbaum described the call as "excellent and respectful".
Goods including televisions, avocados and beef could all be relieved from tariffs as they all come under USMCA. However, a White House official said that around 50% of Mexican imports and 62% of Canadian imports could still face tariff duties, as noted by the BBC.
Canada disputes
Discussions with Canadian prime minister Justin Trudeau yesterday are said to have been more “colourful”, according to Trudeau himself, who said that “our goal remains to get these tariffs, all tariffs removed”.
Doug Ford, the premier of Ontario, said that "a pause on some tariffs means nothing", and he said before the tariff relief was confirmed that he still planned to implement a 25% tariff on his region’s electricity exports to the US states of New York, Michigan and Minnesota, according to the BBC.
"Honestly,” he said, “it really bothers me. We have to do this, but I don't want to do this.”
Canada’s retaliatory measures, which include 25% tariffs on its imports of CA$30bn in US goods, have sparked a reaction from some in the Trump administration.
Scott Bessent, the Treasury secretary, spoke at the Economic Club of New York to say:
“If you want to be a numbskull like Justin Trudeau and say, 'Oh we're going to do this', then tariffs are probably going to go up.”
The view from the US
Speaking to the FT, Council on Foreign Relations senior fellow Edward Alden said that the US’ tariff policies could shift in response to negative responses from markets.
“If we see a prolonged market downturn and the president is hearing from all his rich friends about how he’s messing up their portfolios and destroying their businesses,” he told the paper, “then maybe at that point he will think again.”
Also speaking to the paper in response to the rapid changes in trade policy was Traci Tapani, co-president of US manufacturer Wyoming Machine.
She said that, while uncertainty is a normal part of doing business, “when people are doing things that are intentionally leading to chaos it makes it really hard to run a company”.
