Donald Trump pulled back from his trade war with Mexico on Thursday, temporarily delaying tariffs on many goods from the country once again, but continued to attack Canada.
Two days after imposing sweeping tariffs on all imports from his country’s closest trading partners, the US president announced that duties on a wide range of products from Mexico would be shelved until April.
Trump has already softened the attack on Canada and Mexico, granting carmakers a one-month reprieve after they warned of widespread disruption. Top retail CEOs have also been bracing customers for significant price increases in grocery stores within days.
After a call with Claudia Sheinbaum, the Mexican president, Trump declared that “Mexico will not be required to pay Tariffs on anything” that fall under an existing trade deal between the US, Mexico and Canada known as USMCA.
Tariffs are not paid by countries, but importers – in this case, US companies – who buy products from businesses in the targeted countries.
“This Agreement is until April 2nd,” Trump wrote on his Truth Social platform on Thursday. “I did this as an accommodation, and out of respect for, President Sheinbaum. 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.”
The abrupt reversal and reprieve for Mexico raised immediate questions about the future of the Trump administration’s tariffs on Canada. Trump pointedly attacked Justin Trudeau, his Canadian counterpart, shortly before announcing the temporary exemption for Mexican exports.
It is “likely” that relief “will cover all USMCA-compliant goods and services”, Howard Lutnick, the US commerce secretary, told the news network CNBC earlier on Thursday, “so that which is part of President Trump’s deal with Canada and Mexico are likely to get an exemption from these tariffs”.
During the president’s joint address to Congress on Tuesday evening, he acknowledged that tariffs would cause disruption. There will be “a little disturbance, but we’re OK with that”, he said.
Trump had initially pledged to target Canada and Mexico with tariffs on his first day back in office. Upon his return, however, he said he was considering imposing the tariffs at the start of February. Last month, he offered Canada and Mexico a one-month delay at the 11th hour.
Only on Tuesday did he pull the trigger, imposing 25% duties all goods from Mexico, and 25% duties on most goods from Canada, with 10% duties on Canadian energy products. He also doubled a tariff on Chinese exports from 10% to 20%.
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Trump and his allies claim that higher tariffs on US imports from across the world will help “make America great again”, by enabling it to obtain political and economic concessions from allies and rivals on the global stage.
But businesses, both inside the US and worldwide, have warned of significant damage to companies and consumers if the Trump administration pushes ahead with this strategy.
The president has repeatedly vowed to reduce the US trade deficit – the gap between what it exports to the world and imports from it – which hit a record $131.4bn in January.
Trump blamed the trade deficit on Joe Biden, his predecessor, on social media. “I will change that!!!”
