Trump announces one-month pause on Mexican tariffs, no move on Canada

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WASHINGTON — U.S. President Donald Trump said Thursday that Mexico will get a one-month pause on tariffs for most imports — but made no mention of tariffs on Canada — after the economy-wide duties caused market chaos all week.

Trump posted on social media that he made the decision to pause levies on Mexican imports compliant with the Canada-U.S.-Mexico Agreement (CUSMA) on trade until April 2 after he spoke with Mexican President Claudia Sheinbaum.

“I did this as an accommodation, and out of respect for, President Sheinbaum,” Trump said. “Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl.”

Less than an hour before, Trump posted the false claim that Prime Minister Justin Trudeau was “using the Tariff problem, which he has largely caused, in order to run again for Prime Minister.” 

Trudeau is set to step down in just a few days after the Liberal party announces its new leader on Sunday. 

Trudeau and Trump spoke Wednesday in a call the Prime Minister described as “colourful” and the Wall Street Journal said was “heated” and “included profanity.”

U.S. Secretary of Commerce Howard Lutnick told CNBC earlier Thursday that he thinks an agreement is “likely” for both Canada and Mexico.

“This comes from that Canada has done an enormous amount, they’ve offered us an enormous amount of work on fentanyl, and so (has) Mexico,” Lutnick told CNBC Thursday.

Markets have been rioting since Trump followed through Tuesday on his threat to impose sweeping economy-wide tariffs on Canada and Mexico, with a lower 10% levy on Canadian energy.

Ottawa responded with retaliatory tariffs on $30 billion in American goods the same day. Another $125 billion in Canadian tariffs are set to come into effect 21 days later.

Prime Minister Justin Trudeau said earlier Thursday that Canada will stand firm as long as the “unjustified” tariffs remain in place.

Lutnick appeared on multiple TV news programs floating different deals with America’s largest trading partners throughout the week.

On Wednesday, Lutnick told Fox News that Trump was “leaning towards coming up with an idea” that allows a tariff exclusion for Canadian and Mexican markets that are in compliance with the CUSMA free trade deal.

The same day, Trump granted a one-month exemption for any vehicles traded under CUSMA after the Big Three automakers — Stellantis, Ford and General Motors — spoke to the President.

Trump’s trade war has essentially wiped out the continental trade pact, CUSMA’s Canadian and Mexican architects said Wednesday. Canada’s chief negotiator Steve Verheul and Mexico’s chief negotiator Ken Smith Ramos said the devastating duties have technically suspended the trade agreement.

“With 25% tariffs, it blows a complete hole in the trade agreement,” Verheul said.

“It makes it virtually worthless to us,” he said. “In fact, it leaves Canada and Mexico in a far worse position than any other country in the world, practically.”

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Trump pushed ahead with the levies using the International Economic Emergency Powers Act, a national security statute that gives him authority to control economic transactions, after he declared an emergency on fentanyl at the northern border.

But U.S. Customs and Border Protection data shows only a small volume of fentanyl crosses illegally into the United States from Canada. It reports just 13.6 grams of fentanyl seized by northern Border Patrol staff in January.

Verheul said Wednesday that using fentanyl as an excuse to impose tariffs on Canada is unjustified.

“Absolutely none of this is necessary,” he said.

Verheul and Ramos were key figures in the trade talks when CUSMA was negotiated under the first Trump administration to replace the North American Free Trade Agreement. Trump described it at the time as the “best agreement we’ve ever made.”

Verheul and Ramos have partnered with a global law firm and Kevin Brady, a Texas Republican and the former chairman of the House of Representatives committee on ways and means, to form the Coalition for North American Trade.

The coalition’s goal is to defend CUSMA from what its members call the Trump administration’s sabre-rattling.

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Trump also ordered 25% tariffs on all steel and aluminum imports into the U.S. on March 12, which the White House has confirmed would stack on top of the other duties imposed on Canada.

Trump signed an executive order to implement “reciprocal tariffs” starting April 2. Other potential tariff targets include automobiles, copper, lumber and agricultural products.

“It doesn’t make sense anymore,” Ramos said.

Canadian and American officials have said the tariffs targeting Canada and Mexico are meant to rattle the counties ahead of a mandatory 2026 CUSMA review.

The agreement’s architects say that the best-case scenario is that Canada, Mexico and the U.S. agree to tweak the agreement — although that seems unlikely, considering the current geopolitical environment.

“Canadians think the U.S. is no longer a reliable trading partner,” Verheul said at the Washington launch of the coalition.

Brady said the future of the U.S. relationship with Mexico and Canada is no longer clear.

“Leaving this agreement or allowing it to expire will have a very damaging impact on millions of American workers and families,” Brady said.