US President, Donald Trump has handed Mexico and Canada a temporary exemption from tariffs that had taken effect earlier this week.
Trump announced that goods covered under the US-Mexico-Canada Agreement (USMCA); a trade agreement signed between the three countries during his first term, will be exempt for one month.
The move aims to ease trade tensions but leaves uncertainty about Washington’s long-term tariff policies.
The back and forth on tariffs alone is causing confusion.
Trump has routinely threatened or briefly put in place tariffs only to announce delays or pauses, leaving America unclear on how to invest and whether to hire.
Earlier, Trump announced that 25% tariffs on Canada and Mexico would be coming February 1, 2025.
However, those tariffs were delayed — first by a few days and then by a month after both countries sent delegations to negotiate on illegal border crossings and fentanyl.
The latest tariffs on Mexico and Canada went into effect on Tuesday and now have been paused for a month.
Trump signed executive actions stating a one-month reprieve from 25-percent tariffs after a discussion with Mexican President Claudia Sheinbaum and negotiations between Canadian and Trump administration officials.
He said that the tariffs would be delayed until April 2, 2025.
“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.
“Thank you to President Sheinbaum for your hard work and cooperation!”
Donald Trump
However, in a Truth Social post, Trump sharply criticized Canadian Prime Minister Justin Trudeau, whom he accused of trying to capitalize politically on the tariff angst Canadians have felt.
It was notable that Trump initially announced a reprieve for Mexico but not Canada, although he eventually granted one for Canada, too.
“Believe it or not, despite the terrible job he’s done for Canada, I think that Justin Trudeau is using the Tariff problem, which he has largely caused, in order to run again for Prime Minister So much fun to watch!”
Donald Trump
He took a swipe at Canada, calling for the US to be “self-sustaining.”
“We don’t need trees from Canada. We don’t need cars from Canada. We don’t need energy from Canada. We don’t need anything from Canada.”
Donald Trump
Speaking from the Oval Office, Trump also discussed the petition he received from US automakers for an exemption from the cross-border tariffs. “It would’ve hurt the American car companies if I did that,” Trump said of imposing the tariffs.
However, the US President emphasised that the reprieve was only for a month.
“I told them: That’s it. This was a short-term deal. Don’t come back to me after … April 2nd. I don’t wanna hear from you after April 2nd. We’re not gonna be doing it any more. April 2nd is going to be a big day for America.”
Donald Trump
Trade War Looms
Trudeau has been equally and publicly critical of Trump, and he said in a press conference that he expects Canada and the US to be in a trade war for the foreseeable future.
While Trump has postponed tariffs for some products until April 2, 2024, Canada has indicated that its retaliatory tariffs will remain in place for now, though it delayed a second wave of levies.
Trudeau said that all his country’s retaliatory measures would remain in place unless the United States completely rolls back its tariffs, not just temporarily.
Mexico, China and Canada are the United States’ top three trading partners.
Collectively, they shipped $1.4 trillion worth of goods to the US last year, according to Commerce Department data. That accounts for more than 40% of the value of all goods the US imported last year.
A trade war among the three nations poses significant risks to all three economies, threatening to dampen growth, raise prices and cost workers their jobs.
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