UPDATED: Trump pauses Mexico and Canada tariffs for one month in exchange for tighter border security
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Donald Trump has agreed to suspend his aggressive tariff hike against Mexico and Canada by one month after speaking with his counterparts in both nations, who agreed to dispatch 10,000 troops to the borders between their countries and the U.S. in order to police illegal drug trafficking.
Regarding Mexico, Trump wrote on Truth Social that he had had a “very friendly” conversation with President Claudia Sheinbaum and that the soldiers “will be specifically designated to stop the flow of fentanyl, and illegal migrants into our Country”.
As for Canada, Trump said the country agreed to appoint a “fentanyl czar” and signed a new intelligence directive on organized crime and fentanyl backed by $200 million.
The deals temporarily avert what is projected to be a costly trade war. After initially announcing the tariffs, Mexico and Canada announced retaliatory tariffs against the U.S.
U.S. stock markets were down as of Monday evening as traders reacted to the prospect of a developing trade war.
As markets weighed the risk, congressional Democrats protested outside the headquarters of the U.S. Agency for International Development, which the Trump administration has targeted for major cuts and a potential full shutdown.
President Trump paused sweeping 25 percent tariffs that were set to hit Canada for 30 days in exchange for Canada increasing its border security, Prime Minister Justin Trudeau said on X.
Striking a similar deal as Trump did with Mexico, Trudeau said Canada will be deploying 10,000 personnel to the U.S. – Canada border and will also appoint a “Fentanyl Czar”.
Among the other changes, they will launch a joint task force with the U.S. to tackle fentanyl and money laundering problems and list cartels as terrorists.
Speaking in Washington on Sunday after returning from his Mar-a-Lago estate, Trump indicated that the 27-nation European Union would be next in the firing line, but did not say when.
“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them,” he told reporters.
EU leaders meeting at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the U.S. imposes tariffs, but also called for reason and negotiation.
Arriving at the talks, French President Emmanuel Macron said if the EU were attacked in its commercial interests it would have to “make itself respected and thus react”.
Chancellor Olaf Scholz of Germany said the bloc could respond if necessary with its own tariffs against the U.S., but stressed it was better for the two to find agreement on trade.
Trump hinted that Britain, which left the EU in 2020, might be spared tariffs, saying: “I think that one can be worked out”.
The U.S. is the EU’s largest trade and investment partner. According to the Eurostat data from 2023, the United States had a deficit of 155.8 billion euros ($161.6 billion) with the EU in the trade of goods, offset by a surplus of 104 billion euros in services.
EU foreign policy chief Kaja Kallas said there were no winners in a trade war, and if one broke out between Europe and the United States, “then the one laughing on the side is China”.
Economists say the Republican president’s plan to impose 25% tariffs on Canada and Mexico and 10% tariffs on China would slow global growth and drive prices higher for Americans.
Trump says they are needed to curb immigration and narcotics trafficking and spur domestic industries.
