WASHINGTON: President Donald Trump postponed tariffs on Mexico and Canada for nearly one month. This move affects goods under the USMCA agreement.
The delay follows discussions between Trump, Mexican President Claudia Sheinbaum, and Canadian officials. Trump announced the decision on Truth Social.
He stated Mexico would not pay tariffs on USMCA-covered products until April 2. The USMCA is a North American free trade deal.
Trump praised Sheinbaum’s cooperation, citing joint efforts on border security and drug trafficking. Sheinbaum thanked Trump for the discussion.
Sheinbaum confirmed that most Mexican trade with the U.S. is governed by the USMCA. She emphasized its importance in economic relations.
Trade Agreement Details
A White House official clarified that 50% of Mexican and 36% of Canadian imports are USMCA-compliant. Many items remain outside the agreement.
Products like avocados are typically excluded due to compliance costs. However, they often receive tariff-free treatment at customs.
The official encouraged non-compliant producers to register under USMCA rules to avoid the 25% tariff for a month.
Trump previously announced a one-month delay on auto tariffs. Officials said this gives automakers time to shift production.
Experts doubt automakers can relocate operations within a month. Moving production requires extensive planning and investment.
Impact on Energy and Agriculture
Canadian energy remains outside the USMCA agreement. The administration expects a 10% tariff to remain, increasing Northeast U.S. gas prices.
Trump reduced tariffs on Canadian potash from 25% to 10%. This decision aims to support American farmers.
Sheinbaum highlighted reduced fentanyl seizures at the U.S.-Mexico border. She attributed the decline to tighter border controls.
With the tariff delay, Sheinbaum announced that Mexico would not impose retaliatory measures for now.
Mexico’s decision aligns with its broader strategy to maintain stable trade relations with the U.S.
Tensions with Canada
Trump has criticized Canadian Prime Minister Justin Trudeau, accusing him of exploiting tariff concerns for political gain.
Initially, Trump granted Mexico a reprieve before extending it to Canada. He accused Trudeau of mismanaging Canada’s economy.
Trudeau responded by asserting Canada’s retaliatory tariffs would stay unless the U.S. fully cancels its tariff policies.
He predicted ongoing trade conflicts between Canada and the U.S. unless significant policy changes occur.
The situation remains uncertain as negotiations between the three nations continue. The deadline for tariff implementation is April 2.
