President Donald Trump has signed executive actions delaying tariffs on certain goods from Mexico and Canada for nearly a month. The tariffs, which had been imposed on a broad range of imports, will now be suspended until 2 April for products covered by the United States-Mexico-Canada Agreement (USMCA).
The decision followed a phone conversation between Trump and Mexican President Claudia Sheinbaum, as well as ongoing negotiations with Canadian officials. Trump announced the temporary reprieve on his social media platform, stating, “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA Agreement.”
While Trump framed the move as a gesture of respect towards Mexico, it came after significant market volatility and growing concerns from businesses over the administration’s evolving trade policies.
Trade exemptions and ongoing tariffs
The exemptions apply to about 50% of Mexican imports and 38% of Canadian imports, according to a White House official. Goods compliant with USMCA, including automobiles, are included in the exemption. However, many products that are not formally compliant—such as certain agricultural goods—remain subject to tariffs.
Canadian energy exports are also excluded from the reprieve, meaning the 10% tariff on Canadian oil and gas remains in place, which could lead to higher fuel prices in parts of the United States.
While Mexico’s Sheinbaum welcomed the delay, Canadian Prime Minister Justin Trudeau was less conciliatory. He accused Trump of using trade tensions for political gain and reiterated that Canada would maintain its retaliatory tariffs unless the U.S. fully reversed its trade measures. Ontario Premier Doug Ford announced a 25% tariff on electricity exports to parts of the U.S., escalating tensions between the two countries.
Market reaction and economic concerns
Markets reacted negatively to the uncertainty surrounding U.S. trade policy. The Dow Jones fell 400 points on Thursday before recovering some losses following the tariff suspension. The S&P 500 and Nasdaq also declined, continuing a trend of volatility since Trump took office.
Trump’s approach to tariffs has been inconsistent, with repeated threats, rollbacks, and modifications creating uncertainty for businesses. Critics argue that the administration’s policies are disrupting supply chains, dampening investment, and leading to hiring freezes in certain industries.
Commerce Secretary Howard Lutnick defended the administration’s stance, saying, “We want factory production in America, we want employment to blossom in America, and we’re going to bring factories back to America.”
Future trade measures
Despite the temporary relief, Trump has indicated that additional tariffs could be imposed after 2 April. He has floated the idea of “reciprocal tariffs,” which would match import duties imposed by other countries on U.S. goods. The administration has yet to provide details on which products or nations might be affected.
Trump’s ongoing trade disputes extend beyond North America. Tariffs on Chinese goods, including a 10% levy introduced in February, remain in place. The administration has also eliminated a duty-free exemption for low-value Chinese imports, disrupting package deliveries from China to the U.S.
For now, businesses and investors remain in a state of uncertainty, with further trade policy shifts possible in the coming weeks.
