US President Donald Trump has announced that Mexico will not be required to pay tariffs on goods covered under the United States-Mexico-Canada Agreement (USMCA) until 2 April. However, he has yet to confirm whether the exemption will also apply to Canada, though a Canadian government source told the BBC that the country expects similar treatment.
The announcement marks Trump’s second tariff-related reversal in two days. On Wednesday, he temporarily spared car manufacturers from a 25% import tax that had taken effect just a day earlier.
Commerce Secretary Howard Lutnick suggested in an interview with CNBC that the tariff suspension for car parts imported from Mexico and Canada could be extended to all products covered by the USMCA. The trade pact, signed in 2020 as a successor to the North American Free Trade Agreement (NAFTA), governs trade in key sectors, including automobiles, dairy, and lumber, and includes a review every six years.
Trump confirmed the temporary exemption for Mexico in a statement on Truth Social, following a conversation with Mexican President Claudia Sheinbaum. Sheinbaum described the discussion as “excellent and respectful,” adding that both nations pledged to collaborate on stopping the flow of fentanyl into the US and curbing gun trafficking into Mexico.
Meanwhile, Canadian Prime Minister Justin Trudeau responded to Lutnick’s remarks with cautious optimism, calling them “promising.” However, Trump has since criticised Trudeau on social media, claiming the Canadian leader has done a “terrible job” for the country. Despite the attack, reports suggest an exemption for Canada is expected to be announced soon.
Ontario Premier Doug Ford, however, announced that the province would proceed with a 25% tariff on electricity exports to 1.5 million homes and businesses in New York, Michigan, and Minnesota starting Monday, signalling Canada’s willingness to retaliate if necessary.
The tariffs have sparked tensions not only between the US and its North American neighbours but also with China. Trump argues that imposing tariffs will protect American industries and boost domestic manufacturing. However, many economists warn that such measures could drive up consumer prices and disrupt supply chains.
The US Commerce Department reported that fears of tariffs led to a surge in imports in January, pushing the US trade deficit up by 34% to over $130 billion, with imports rising by 10% for the month.
As the 2 April deadline approaches, businesses and policymakers across North America remain on edge, awaiting further clarity on the future of trade relations under the USMCA.
Melissa Enoch
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