WASHINGTON — President Donald Trump has postponed his planned tariffs targeting Mexico for an additional month to facilitate further discussions. This decision came after Mexican President Claudia Sheinbaum consented to deploy 10,000 members of her nation’s National Guard to the border to combat drug trafficking issues.
Although tariffs against Canada and China are still anticipated to be implemented immediately, concerns linger about the sustainability of any agreements reached, raising fears of a potential trade war. Trump has signaled that he may impose more import taxes in the future.
A Canadian official, speaking anonymously, indicated a lack of confidence in Canada being able to sidestep the impending tariffs as Mexico had. They expressed that the U.S. administration is altering its demands on Canada more frequently than it has with Mexico.
When asked what Canada might offer to avoid the tariffs, Trump conveyed uncertainty, stating, “I don’t know,” during a media gathering in the Oval Office. He also hinted at the possibility of heightened tariffs on China, saying, “If we can’t make a deal with China, then the tariffs will be very, very substantial.”
The postponement was announced by Trump following a “very friendly conversation” with Sheinbaum, and he expressed eagerness for the upcoming negotiations. Trump mentioned that Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, Secretary of Commerce nominee Howard Lutnick, and high-ranking Mexican representatives would lead the discussions.
As part of the discussions, Sheinbaum proposed revisions to border policies and confirmed the deployment of additional troops to the border. She highlighted on social media that “Mexico will reinforce the northern border with 10,000 members of the National Guard immediately, to stop drug trafficking from Mexico to the United States, particularly fentanyl.” She also noted that the U.S. is committed to halting the trafficking of powerful weapons into Mexico.
Earlier, Trump took to social media to mention a conversation with Canadian Prime Minister Justin Trudeau, indicating that he would have another discussion with him later in the day. While both Canada and Mexico were preparing to establish their own tariffs in response to U.S. measures, Mexico is currently holding off on that front.
Trump reiterated on social media that Canada has not been as cooperative as expected, despite a long-standing relationship marked by collaboration. He criticized Canada for its restrictions on U.S. banks operating there, questioning, “What’s that all about?” He further linked the issues to a broader drug crisis, pointing out the significant fatalities in the U.S. related to drugs crossing from both Mexico and Canada.
The financial markets, alongside businesses and consumers, braced for the potential impact of new tariffs. Initial stock market reactions suggested some traders hoped that these import taxes could be temporary, despite concerns about rising inflation and disrupted global trade.
Market reactions revealed a broader apprehension toward a president who has displayed a steadfast commitment to tariffs, even stating that the U.S. government made a mistake back in 1913 when it transitioned to income taxes as a primary revenue source.
Trump indicated that tariffs could be lifted if Canada and Mexico took more significant steps to address illegal immigration and fentanyl trafficking, although specific criteria for assessing progress were not identified. Additionally, he stressed that the U.S. could no longer sustain a trade imbalance with its largest trading partners.
Mexico is facing a planned 25% tariff, while Canadian imports to the U.S. could be subject to a 25% tariff, with an additional 10% for its energy products. The White House has cited China as being subject to a 10% extra tariff, particularly due to its involvement in fentanyl production and distribution.
Kevin Hassett, director of the White House National Economic Council, stated that referring to the situation as a trade war could be misleading, despite the potential for retaliation and escalation. He clarified that President Trump has been unequivocal in framing this as a “drug war.”
Yet, amidst a focus on combating illegal drugs, Trump has frequently expressed concerns that foreign nations are exploiting the U.S. through trade surpluses. Recently, he noted that soon tariffs would also affect European Union countries. He has characterized tariffs as a means of addressing national security concerns, generating revenue, and renegotiating trade agreements.
Numerous economists outside the government have cautioned that these tariffs could raise prices and hinder economic growth. Trump himself acknowledged the likelihood of some short-term economic distress, having previously campaigned on curbing inflation.
