Trump hits pause on Canada and Mexico tariffs — again
President Donald Trump’s 25% tariffs on imports from Mexico and Canada won’t apply to goods that comply with an existing trade agreement, giving companies a temporary reprieve.
“I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement,” Trump said on social media, referring to the trade deal he negotiated during his first term in office. “I did this as an accommodation, and out of respect for, President [Claudia] Sheinbaum.”
Despite Trump’s phrasing, Mexico would not actually pay for his tariffs. Border agents collect the federal government’s cut from the company that’s paying to import a foreign product. In this case, that means U.S. companies pay more to import the same goods from Mexico.
The reprieve comes just a few days after the president’s tariffs went into effect following an earlier one-month delay negotiated by Mexico, which had agreed to send more military personnel to its border with the U.S. Sheinbaum was set to detail Mexico’s retaliation against Trump’s tariffs on Sunday.
“Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl,” Trump wrote.
The Wall Street Journal (NWSA), citing an unnamed White House official, reports that Canadian goods that comply with the USMCA’s requirements will also get a one-month exemption. The U.S. on Tuesday slapped a 25% tariff on most imports, with energy products receiving a 10% rate.
The exemption covers about half of all imports from Mexico and 37% of imports from Canada, the Journal reported. The exemptions are not retroactive for any tariffs paid by importers since Tuesday morning.
The tariffs are set to kick back in on April 2, when Trump plans to announce his reciprocal tariffs, which he says will make trade more fair to the U.S. Later this month, duties on foreign steel and aluminum are scheduled to take effect.
The delay for Canada comes as Trump and Prime Minister Justin Trudeau have publicly argued over the trade war. A call between the two leaders on Wednesday grew heated and included profanity, the Journal reported.
Trump has accused Trudeau of using tariffs as an excuse to run for re-election. In January, Trudeau said he would resign as the leader of Canada’s Liberal party. The next leader is set to be announced on March 9.
On Tuesday, Trudeau claimed Trump’s justification for his tariffs is “completely bogus,” adding that the U.S. president wants to see the “total collapse of the Canadian economy” and annex the nation. China, which was hit with 20% duties, has likewise called Trump’s stated reasoning a “pretext” for retaliation.
According to Trump’s orders announcing his tariffs, the duties are being used to force Canada, Mexico, and China to do more to prevent the flow of undocumented immigrants and illegal drugs through the U.S.’s southern and northern borders. Almost 87,000 Americans died from drug overdoses in the 12-month period that ended in September 2024.
The vast majority of fentanyl seized by Customs and Border Patrol was intercepted at the U.S.’ southwest border with Mexico. According to the Committee for Foreign Relations, just 43 pounds of fentanyl was seized at the Canadian border, a fraction of the almost 21,900 pounds seized last year.
