President Donald Trump agreed to postpone the 25% tariff on imports from Canada and Mexico for a month after leaders of both countries announced steps to increase border security. This prevented, at least for the time being, tariffs that could have increased prices for American consumers and slowed down the economies of both countries.
In an effort to curb the flow of fentanyl, Canadian Prime Minister Justin Trudeau said on social media Monday afternoon that his country will be investing $1.3 billion in a plan to fortify its border with more troops, equipment, and helicopters.
In his post, Trumpsoon also discussed the agreement, highlighting the fentanyl issue and stressing that tariffs will be “paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured.”
In order to combat drug trafficking from Mexico into the United States, especially fentanyl, Mexican President Claudia Sheinbaum said earlier in the day on social media that her country will instantly bolster its northern border with 10,000 soldiers of its National Guard.
The U.S. will continue to negotiate border security with Mexico under the leadership of Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and Commerce Secretary Howard Lutnick, Trump stated once more in his own social media post.
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Following Trump’s signing of an executive order on Saturday to impose a 25% tariff on almost all goods entering the United States from Canada and Mexico beginning on Tuesday, the announcements were made. The action posed the risk of starting a trade war with two of the United States’ closest trading partners, which might have raised the cost of a variety of items for American consumers, such as fuel, fresh vegetables, automobiles, and building supplies.
Additionally, Trump imposed a 10% tariff on all Chinese imports and took action to eliminate a loophole that permits Chinese e-commerce firms, such as Temu and Shein, to send shipments under $800 into the United States duty-free in order to avoid duties. Those tariffs are still scheduled to take effect on Tuesday.
China stated that it will contest the levies in the World Trade Organization and respond with unidentified countermeasures.
The tariff announcement over the weekend caused stocks to drop Monday morning, but they somewhat recovered after the agreement with Mexico. Economists and industry associations had cautioned that the tariffs may increase costs in the United States and cause an economic slowdown because Mexico is the country from which the United States imports the most commodities.
Trump also threatened to impose tariffs on Mexico during his first term, but he backed off less than two weeks later when Mexico announced plans to use its national guard across the nation to crack down on immigration and expand a program where some migrants seeking asylum in the US would wait in Mexico for their immigration court hearings.
On Saturday night, Trudeau had earlier declared that Canada will impose a 25% tariff on $155 billion worth of U.S. goods in retaliation for Trump’s tariffs. As of Tuesday, the day the United States announced it will start collecting tariffs on Canadian exports, it was supposed to include immediate tariffs on $30 billion worth of goods.
Trump claimed that Canada had treated the United States unfairly earlier in the day on Monday, seemingly dismissing the necessity of commerce with the country.
They are not necessary to produce our automobiles. We don’t require lumber from them. Trump told reporters, “We have all the agriculture we need, so we don’t need them for agricultural products.”
According to industry analysts, tariffs on Canada would have increased the cost of a variety of items, such as autos, heating fuel, and lumber.
In the presidential order imposing the tariffs, the White House said that the action was a reaction to the influx of immigration and fentanyl from Canada and Mexico, which Trump was claiming was a national emergency. In a national emergency, the president can control trade under the International Emergency Economic Powers Act.
According to U.S. Customs and Border Protection data, in 2024, U.S. law enforcement confiscated 21,900 pounds of fentanyl, almost all of which were at the southern border, while only 43 pounds were at the northern frontier.
However, Trump appeared to go against that logic in a number of social media tweets over the weekend, urging businesses to produce their goods in the United States and pointing to a trade deficit with the three nations. Trump claimed in a different post that the tariffs would force Canada to join the United States.
We give SUBSIDIZE Canada hundreds of billions of dollars. Why? There’s no explanation. Nothing they have is necessary for us. We should build our own cars, have more lumber than we can ever use, and have limitless energy. Canada is no longer a viable nation without this enormous subsidy. It’s harsh, but accurate! Canada ought to become our beloved 51st state as a result. The Canadian people will benefit from significantly better military protection, far reduced taxes, and no tariffs! Trump stated on Truth Social.
Sheinbaum of Mexico said she spoke with Trump over the phone Monday morning and they came to an arrangement on the tariff postponement. She claimed that during the discussion, she also urged American officials to take more action to halt the importation of powerful firearms into Mexico, which she claimed are being used by criminal organizations in Mexico.
Sheinbaum claimed that when Trump asked her how long the tariffs should be suspended, she first replied indefinitely.
She claimed that after some back and forth, Trump accepted her suggestion for a one-month halt.
“I am sure that in this month we will be able to give results,” she stated.