Trump temporarily halts tariffs on Mexico, talks With Canada unresolved

U.S. President Donald Trump has decided to pause tariffs on Mexico for one month, following discussions with Mexican President Claudia Sheinbaum.

However, negotiations with Canada have yet to yield a resolution, raising concerns about escalating trade tensions.

The tariff suspension was announced Monday after a last-minute agreement between Trump and Sheinbaum. As part of the deal, Mexico will deploy 10,000 troops to its border with the United States to help curb illegal crossings.

Trump shared the update on his Truth Social platform, describing his conversation with Sheinbaum as “very friendly” and confirming the one-month pause on tariffs. He stated that the two countries would continue discussions in an effort to reach a broader agreement.

Sheinbaum also announced the decision, emphasising that the discussions were held “with great respect for our relationship and sovereignty.” Additionally, she noted that Trump had agreed to strengthen measures against U.S. weapons trafficking into Mexico, though this point was absent from Trump’s statement.

While progress was made with Mexico, talks with Canadian Prime Minister Justin Trudeau have been more difficult. Trump confirmed that he had spoken with Trudeau and planned another call later in the day. However, the White House acknowledged that negotiations with Canada had not progressed as well as those with Mexico.

The proposed tariffs - a 25% levy on imports from both Canada and Mexico, along with an additional 10% on Chinese goods - were set to take effect at midnight on Tuesday. While Mexico has secured a temporary reprieve, Canada has yet to reach an agreement, prompting further uncertainty.

Trump defended his tariff strategy, arguing that it was necessary to combat drug trafficking, particularly the flow of opioids into the United States. However, government data suggests that only a small percentage of illicit drugs enter through Canada.

The prospect of a global trade war caused significant market volatility, with stock markets in the U.S., Europe, and Asia experiencing sharp declines. Wall Street opened lower, while major indices in Frankfurt and Paris fell by nearly 2%. The Mexican peso and Canadian dollar also weakened against the U.S. dollar.

Despite economic concerns, oil prices surged as Trump limited tariffs on Canadian energy imports to 10% in an effort to prevent a sharp rise in fuel costs.

In response to the U.S. tariff threats, Canada has vowed to retaliate. The province of Ontario has already taken action, barring U.S. companies from bidding on billions of dollars’ worth of government contracts. Additionally, Ontario canceled a deal with Elon Musk’s Starlink - a move seen as a direct response to Trump’s trade policies.

Ontario Premier Doug Ford expressed strong opposition to the tariffs, stating on X (formerly Twitter), “Ontario won’t do business with people hellbent on destroying our economy.”

Trump has intensified pressure on Canada, even suggesting that it should become the 51st U.S. state - a controversial remark he has made multiple times, most recently on Sunday.

Despite his firm stance on tariffs, Trump acknowledged that the policy could cause short-term economic pain. Speaking to reporters after returning from his Florida resort, the 78-year-old president said, “We may have short-term a little pain, and people understand that.”

However, he maintained that in the long run, the U.S. would benefit, arguing that the country has been “ripped off by virtually every country in the world.”

Trump has frequently used tariffs as a bargaining tool in his broader foreign policy efforts. Most recently, he threatened trade penalties on Colombia after it blocked U.S. military planes carrying deported migrants.