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President Trump pauses Mexico and Canada tariffs until April 2

March 6, 2025 Benjamin Hughes

President Trump on Thursday said he will pause 25% tariffs on U.S. imports from Mexico and Canada that are covered under a 2020 trade agreement, delaying levies imposed on the nations earlier this week. 

Mr. Trump announced the delay in the Mexico tariffs in a social media post after a call with Mexican President Claudia Sheinbaum. On Thursday afternoon, he signed two executive orders stating the exemptions would apply to U.S. imports of products from both Mexico and Canada that are covered by the USMCA. Goods that are not covered by the agreement remain subject to tariffs. 

“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,” Mr. Trump wrote, referring to the United States-Mexico-Canada Agreement. He characterized the move “as an accommodation” for the Mexican leader.

“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. Thank you to President Sheinbaum for your hard work and cooperation!” Mr. Trump added. 

The USMCA agreement covers the vast majority of imports from Mexico. In a press conference Thursday, Sheinbaum said that nearly all of Mexico’s trade with the U.S. is covered under the trade pact which is in effect until April 2.

In 2023, the U.S. imported more than $45 billion worth of agricultural products from Mexico. Almost three-quarters of such imports consisted of vegetables, fruit, beer, tequila and other drinks and spirits, according to the U.S. Department of Agriculture.

Canadian energy, which is not included in the USMCA, is expected to be tariffed at 10%, which could boost gas prices and heating and electricity costs in the U.S. Potash that U.S. farmers import from Canada would be tariffed at the same rate. 

International trade expert Barry Appleton, a senior fellow at the Center for International Law at New York Law School, told CBS MoneyWatch that “a massive amount of goods” fall under the brief exemption from tariffs on imports from Canada. They include auto parts, steel and aluminum, beef and other products.

Despite the brief reprieve. uncertainty around the tariffs have “broken complex supply chains that will never be fixed,” Appleton said. 

Matthew Holmes, chief of public policy at the Canadian Chamber of Commerce, underlined the importance of cooperation on trade. 

“Though today’s delay mitigates some of economic damage U.S. tariffs will cause, this is not a moment to celebrate. The economy is not a toy to play with. Constant threats and economic uncertainty have taken their toll. We see it in delayed business investments, shaky consumer confidence, stalled capital flows and a volatile stock market. People’s livelihoods are at stake,” he said in a statement provided to CBS MoneyWatch. 

“The only outcome that makes sense for both economies is for all tariffs to be taken off the table, without exception,” Holmes added.

Economists have warned that tariffs are likely to lead to price increases on an array of goods, from vegetables and fruit to automobiles. Levies on materials from Canada and Mexico used in car production won’t go into effect immediately after Mr. Trump also issued one-month exemption from tariffs for automakers Wednesday, following conversations with Ford, General Motors and Stellantis, the parent company of Chrysler, Dodge, Jeep and Ram.

Mr. Trump has flip-flopped on tariffs before, and business leaders say uncertainty around which policies will actually take effect has created confusion for businesses and consumers.

Some of the most prominent retail executives in the U.S. have spoken out about the tariffs, saying they’d almost certainly lead to increased costs, some of which will be passed along to American consumers.

Megan Cerullo

Source: cbsnews.com