Trump Pauses Tariffs on Mexico and Canada for 30 Days

Mexico and Canada Avoid Tariffs with New Agreement

U.S. President Donald Trump temporarily halted his threat to impose steep tariffs on Mexico and Canada, announcing a 30-day pause on Monday. The decision came after securing concessions from both neighboring countries on border security and crime enforcement. Following the announcement, the U.S. dollar dipped, reversing gains from earlier in the session.

(U.S. Dollar Index Daily Price Chart, Source: Trading View)

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum confirmed their commitment to strengthening border enforcement in response to Trump’s demands to curb illegal immigration and drug smuggling. This agreement effectively delays the implementation of 25% tariffs, which were set to take effect on Tuesday, for at least 30 days.

As part of the deal, Canada pledged to deploy advanced technology and additional personnel along its U.S. border while collaborating on efforts to combat organized crime, fentanyl trafficking, and money laundering. Meanwhile, Mexico agreed to bolster security at its northern border by deploying 10,000 National Guard members to curb illegal migration and drug flow. Additionally, the U.S. committed to taking measures to prevent the trafficking of high-powered weapons into Mexico.

After speaking with both leaders by phone, Trump expressed his intention to negotiate economic agreements with the United States’ two largest trading partners over the next month. Since the 1990s, Canada and Mexico have maintained deeply integrated economic ties with the U.S. through a landmark free trade agreement.

However, no similar reprieve has been offered to China, which faces sweeping 10% tariffs scheduled to take effect at 12:01 a.m. ET on Tuesday. A White House spokesperson stated that Trump would not engage in discussions with Chinese President Xi Jinping until later in the week. “Hopefully, China will stop sending fentanyl to the U.S. If not, tariffs will rise substantially,” Trump warned. In response, China dismissed fentanyl as an American issue and vowed to challenge the tariffs at the World Trade Organization while considering countermeasures. Nevertheless, it signaled a willingness to keep diplomatic channels open for further negotiations.

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