Days after he announced a 25% tariff on imports from Canada and Mexico, President Donald Trump agreed to delay them for one month after the leaders of Canada and Mexico announced moves to ramp up security at their borders — averting, at least for now, tariffs that could have driven up prices for U.S. consumers and stalled the countries' economies.
Canadian Prime Minister Justin Trudeau wrote on social media Monday afternoon that Canada would spend $1.3 billion on a plan to reinforce its border with new helicopters, technology and personnel, as well as additional resources to stop the flow of fentanyl. Canada had announced its $1.3 billion border and immigration investment at the end of last year.
Trump soon posted, as well, focusing on fentanyl and emphasizing that tariffs would be "paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured."
Earlier in the day, Mexican President Claudia Sheinbaum posted on social media that Mexico will immediately reinforce its northern border with 10,000 members of its national guard to address drug trafficking from Mexico into the United States, particularly fentanyl.
Once again, Trump said in his own post on social media that the United States will continue negotiations with Mexico over border security, headed by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.
Trump signed an executive order Saturday to place 25% tariffs on nearly all goods coming into the United States from Canada and Mexico starting Tuesday. The move risked triggering a trade war with two of American’s closest trading partners that could have driven prices higher for American consumers on a variety of goods, including cars, fresh produce, homebuilding materials and gasoline.
Trump also placed a 10% tariff on all Chinese imports and took steps to close a loophole that allows Chinese e-commerce companies like Temu and Shein to avoid tariffs by shipping packages worth less than $800 into the United States duty free. Those tariffs went into effect on Tuesday at 12:01 a.m. ET, shortly after which China announced its own tariffs on some U.S. products.
China also said earlier that it will challenge the tariffs at the World Trade Organization and take unspecified “countermeasures” in response.
Stocks fell Monday morning in response to the tariff announcement over the weekend but recovered some of the losses after the agreement with Mexico was announced. The United States imports more goods from Mexico than any other country, and economists and business groups had warned the tariffs could raise prices in the United States and trigger an economic slowdown.
During his first term, Trump also threatened to place tariffs on Mexico, before he backed away less than two weeks later when Mexico responded with plans to deploy its national guard throughout the country to crack down on immigration and expand a program in which some migrants seeking asylum in the United States would wait for their immigration court hearings in Mexico.
Trudeau had announced Saturday night that Canada would respond to Trump's tariffs by issuing its own 25% tariff on $155 billion Canadian worth of U.S. goods. That was set to include immediate tariffs on $30 billion worth of goods as of Tuesday, the day the United States said it would begin collecting tariffs on Canadian goods.
Earlier Monday, Trump seemed to dismiss the need for trade with Canada and said it had treated the United States unfairly.
“We don’t need them to make our cars. We don’t need them to give us lumber. We don’t need them for agricultural products, because we have all the agriculture we need,” Trump told reporters.
Tariffs on Canada would have driven prices higher for a wide variety range of goods, including lumber, cars and heating fuel, industry analysts said.
The White House said in the executive order issuing the tariffs that the move was in response to the flow of fentanyl and immigrants coming into the country from Canada and Mexico, which Trump was declaring a national emergency. Under the International Emergency Economic Powers Act, the president has authority over trade in a national emergency.
Nearly all of the 21,900 pounds of fentanyl U.S. law enforcement seized last year was at the southern border, with just 43 pounds of fentanyl seized at the northern border, according to data from U.S. Customs and Border Protection.
But in several social media posts over the weekend, Trump seemed to contradict that rationale, instead citing a trade deficit with the three countries and calling on companies to make their products in the United States. In another post, Trump said the tariffs would pressure Canada to join the United States.
“We pay hundreds of Billions of Dollars to SUBSIDIZE Canada. Why? There is no reason. We don’t need anything they have. We have unlimited Energy, should make our own Cars, and have more Lumber than we can ever use. Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true! Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada — AND NO TARIFFS!” Trump said on Truth Social.
Sheinbaum said she and Trump reached the agreement on the tariff delay for Mexico in a phone call Monday morning. In the call, she said, she also asked U.S. officials to do more to stop the flow of high-powered guns into Mexico, which she said are being used by Mexican criminal groups.
Sheinbaum said Trump asked her how long the tariffs should be paused, and she initially said forever.
After some back-and-forth, she said, she suggested a monthlong pause, to which Trump agreed.
"I am sure that in this month we will be able to give results," she said.
