Donald Trump Announces 30-Day Halt in Tariffs on Canada and Mexico
In a major development, former U.S. President Donald Trump announced a 30-day suspension of tariffs on Canada and Mexico after last-minute agreements with both countries. The decision comes after global financial markets reacted negatively to Trump’s threats of imposing 25% tariffs on exports from these neighboring countries. However, after calls from Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, deals were reached to tighten border measures, leading to the postponement of tariffs.
Trump confirmed the halt after what he described as "very friendly" talks with Sheinbaum. As part of the agreement, Mexico committed to deploying 10,000 troops to the U.S.-Mexico border to address issues related to migration and fentanyl smuggling. This move aims to curb the influx of illegal substances into the United States, a key concern for the Trump administration. Meanwhile, the U.S.-Canada negotiations appeared to be more tense, but after two separate discussions, Trump said he was "very pleased" with the outcome.
According to Trump, Canada agreed to strengthen border security, take measures against drug cartels, and list fentanyl as a major threat. Additionally, Trudeau announced that Canada would deploy nearly 10,000 frontline officers to secure the northern border and appoint a "Fentanyl Czar" to oversee anti-drug efforts. While Canadian officials had previously stated that 8,500 personnel were already stationed at the border, it remains unclear how much the new measures will differ from existing policies.
The decision to delay the tariffs helped stabilize financial markets, which fears of a global trade war had rattled. Earlier in the day, Wall Street’s major indices dropped sharply but recovered after news of the Mexico deal. However, European markets remained in the red as Trump hinted at the possibility of tariffs on the European Union and Britain. Additionally, the Canadian dollar and Mexican peso weakened against the U.S. dollar, reflecting economic uncertainty. Oil prices, on the other hand, surged as Trump imposed a limited 10% tariff on Canadian energy imports to prevent fuel price spikes.
Despite the temporary truce with Canada and Mexico, Trump’s trade war with China remains active. Beijing faces an additional 10% duty on top of existing tariffs, and last-minute talks between the U.S. and China are expected in the next 24 hours to prevent further economic disruption. Trump has previously accused China of unfair trade practices and intellectual property theft, making it a prime target for his aggressive tariff strategy.
The White House described the new deals as part of a "drug war" rather than a trade war. National Economic Council Director Kevin Hassett emphasized that the focus was on stopping drug trafficking rather than trade disputes. However, some reports indicate that only a small percentage of illegal drugs enter the U.S. through Canada, raising questions about the true impact of these measures.
Canada had initially vowed to retaliate against the tariffs, with Ontario banning U.S. firms from bidding on government contracts and terminating a deal with Trump ally Elon Musk’s Starlink. Tensions between Trump and Canada escalated further as the former U.S. president suggested that Canada should become the "51st state" of the United States. These remarks added to the political crisis in Canada, where Trudeau recently announced his resignation, triggering early elections.
Trump’s tariff policies have long been a controversial aspect of his leadership. He has repeatedly claimed that tariffs force foreign exporters to bear the cost rather than American consumers, despite widespread criticism from economists. The 78-year-old billionaire has shown no signs of backing down from his economic strategy and has continued to use tariffs as a bargaining tool in broader policy negotiations.
As Trump returned from his Florida resort, he acknowledged that Americans might feel some economic "pain" as a result of his trade policies. However, he remains firm on his stance, viewing tariffs as a key tool to secure favorable deals for the United States. With tensions still high between major trading partners, the next steps in Trump’s trade war will be crucial in shaping the future of global economic relations.