US Pauses Mexico Tariffs Following Border Security Agreement
US President Donald Trump has agreed to delay new tariffs on Mexico for one month after Mexico committed to deploying 10,000 National Guard members to its northern border to curb illegal migration and drug trafficking. According to Mexican President Claudia Sheinbaum, the agreement, which was announced on Monday, includes a US pledge to take stronger action against the smuggling of high-powered firearms into Mexico.
Hours before tariffs targeting Mexico, China, and Canada were set to come into force, Trump reportedly had a telephonic talk with Sheinbaum over the deal. She confirmed later on that both sides had agreed upon the temporary suspension of tariffs due to both taking up the task to negotiate during this month’s one-month halt.
“I look forward to participating in those negotiations with President Sheinbaum as we try to get to a ‘deal’ between our two countries,” Trump wrote on Truth Social.
Economic Consequences and Market Response
Economists had warned that the sweeping tariffs, which covered trade worth $2.1 trillion, could have serious effects on businesses and consumers. News of the tariffs had already triggered volatility in financial markets, as US and global stocks declined. But with news of the reprieve to Mexico, the S&P 500 pared its losses, closing 0.6% lower. Mexico’s peso also found some relief after the announcement.
Sheinbaum has addressed reporters from Mexico City; she emphasized how important negotiations between the two groups are: “We have this month to work and convince each other that this is the best way forward.”
No Relieve in Store for Canada or China
Even as the suspension of tariffs eased some pressure on Mexico, no relief seemed to be in sight for Canada or China. Trump and his administration did not stop castigating Canada, with the president declaring that “We’re not treated well by Canada, and we have to be treated well.”
Trump also threatened to raise the ante against China, saying he might triple the tariffs imposed, which now stand at 10%. He linked the issue to Beijing’s role in fentanyl trafficking. The president said, “China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher.”
Canadian Prime Minister Justin Trudeau spoke with Trump twice on Monday, but the tariffs against Canada remained set to take effect. Canada has already announced retaliatory measures in response. A senior Canadian official, speaking to The New York Times, said Ottawa was not optimistic about securing a similar delay.
Potential EU Tariff Targeting and Global Concerns
He also hinted that the European Union could be his next target in terms of trade penalties. “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 in Washington.
EU leaders said they would be ready to retaliate if need be, but preferred negotiation to a trade war. German Chancellor Olaf Scholz declared that the EU can apply tariffs on its part, but underscored that any dispute needs diplomatic resolution.
EU foreign policy chief Kaja Kallas threatened that the ever-escalating trade tensions between the US and Europe would only work in favor of China, where she said “There are no winners in a trade war. The one laughing on the side is China”.
As the tensions between the US and its trading partners continue, Trump seemed to indicate that tariffs on the UK may be a possibility he will bypass, declaring, “I think that one can be worked out.
With the Mexico tariffs on hold, negotiations over trade policies and border security will take center stage in the coming weeks. Whether Mexico can satisfy Trump’s demands within the one-month window remains uncertain. Meanwhile, Canada, China, and the European Union prepare for potential economic fallout as the US trade battle continues to escalate.