Mexico gets 90-day reprieve from Trump’s 30% tariff threat
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The news: Donald Trump has extended the deadline for a tariff deal with Mexico by another 90 days, saying the decision was due to the complexities of the trading relationship.
In a social media post, Trump said Mexico will continue to pay a 25% fentanyl tariff, 25% tariff on cars and 50% tariff on steel, aluminium and copper.
He said Mexico agreed to “immediately terminate its Non Tariff Trade Barriers, of which there were many,” though he did not specify what specifically he meant.
Trump had threatened to impose 30% tariffs on most Mexican exports in a July letter, a move he also aimed at the European Union before settling on a 15% rate with Brussels.
What they said: The extension followed a phone call with Mexican president Claudia Sheinbaum, with whom Trump said he was “getting to know and understand each other.”
Sheinbaum, in her own social media post, said “we avoided the tariff increase announced for tomorrow and we got 90 days to build a long-term agreement through dialogue.”
The context: Dozens of other countries that have not signed a trade deal with the US are facing new punitive tariffs from 1 August, including some of the world’s poorest nations such as Lesotho, Bangladesh and Nepal, as well as wealthy economies like Canada and Taiwan.
Hours earlier, Trump said Canada’s prime minister Mark Carney was making it very hard to reach a trade deal because of his announcement backing Palestinian statehood at an upcoming United Nations meeting.
In contrast, a day earlier Trump announced a trade agreement with South Korea, setting a 15% tariff rate in line with the deal struck with the European Union, making it one of the few countries securing terms before the deadline.
Meanwhile, a US federal appeals court is reviewing whether Trump exceeded his authority by using emergency powers under the 1977 International Emergency Economic Powers Act to impose the tariffs without congressional approval.
The full 11-judge panel heard arguments on Thursday, with judges questioning whether the law, which “doesn’t even mention” tariffs, justifies their use. A previous court had blocked the duties, but that ruling is on hold pending the outcome of the appeal.
The sources: Donald Trump, Reuters, The Guardian
