Trump clarifies tariff pause extends to Canada after market jitters
Make us a preferred source
Make us a preferred source on Google
The news: Donald Trump clarified that the one-month exemption from 25% tariffs under the USMCA trade agreement, which he announced earlier on social media for goods from Mexico, will also apply to products made in Canada. The exemption lasts until 2 April.
The context: The announcement to halt the tariffs followed renewed volatility in US stock markets, which dropped in morning trading amid fears of the tariffs' economic impact.
Speaking at the Oval Office as he signed a number of executive orders, including one authorising the pause, Trump said the decision had “nothing to do with the market.”
“I’m not even looking at the market,” he said.
Earlier in the day, Trump took to Truth Social to announce his decision on Mexico, without mentioning Canada, leaving investors, economists and Canadians uncertain about whether the tariffs would apply to their country.
Trump delays Mexico tariffs on USMCA goods until April
The news: US President Donald Trump said he will exempt Mexico from the newly imposed 25% tariffs on any goods and services that fall under the USMCA trade deal, delaying them until 2 April.
The announcement via post on his social media site came after a conversation with Mexican President Claudia Sheinbaum, with Trump calling it “an accommodation, and out of respect for, President Sheinbaum.”
It remains uncertain whether Trump will grant Canada the same full exemption from USMCA tariffs as Mexico. However, he has confirmed that Canadian autos and auto parts imported under the trade deal will be excluded.
Trump's announcement on Thursday (Friday AEDT) followed comments from Commerce Secretary Howard Lutnick, who said Trump was considering exemptions for both Mexican and Canadian goods.
“If you operated under Donald Trump’s USMCA, you now have a reprieve from the tariffs. But if you chose to go beyond that, you did so at your own risk, and today is the moment of reckoning,” Lutnick told CNBC.
He added his "off the cuff" estimate was that more than 50% of goods imported from Mexico and Canada were compliant with the USMCA trade deal Trump negotiated during his first presidential term.
The context: The decision follows Trump’s across-the-board tariffs on Canada and Mexico, which included a 10% rate on Canadian energy.
On Tuesday, the first day tariffs came into place, exports from Ciudad Juarez - a manufacturing powerhouse across from El Paso, Texas - to the US dropped by 40%, representing USD100 million ($157.4 million) in goods held back.
Trump has tied the 25% tariffs to efforts to stop fentanyl trafficking and illegal migration, saying they could return after 2 April if progress is insufficient. Separately, the Trump administration has also said that global “reciprocal” tariffs across many sectors, including on pharmaceutical and semiconductor imports, are still planned for 2 April.
What they said: “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement,” Trum posted.
“This Agreement is until April 2nd. 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!”
In contrast, in an earlier post about Canada’s Prime Minister Justin Trudeau, Trump said: “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!”
The source: Donald Trump social media post
