Trump Temporarily Pauses Some Tariffs for Mexico, Canada

President DonaldTrump has granted a one-month reprieve on some tariffs for Canada and Mexico, but warns of reciprocal duties if northern neighbors don’t address fentanyl trafficking and illegal immigration concerns.

Key Takeaways

President Trump has temporarily suspended some tariffs on Canadian and Mexican imports until April 2, 2025.
The pause affects approximately 38% of Canadian and 50% of Mexican goods.
Despite the exemption, tensions remain high as Treasury Secretary Scott Bessent criticized Canadian Prime Minister Trudeau, while Trump accused Trudeau of using the tariff issue for political gain.
Economists warn that if implemented, the tariffs could increase U.S. consumer prices, slow economic growth, and potentially cost American jobs.
While Mexico and Canada received temporary relief, tariffs on Chinese goods remain firmly in place, with China preparing retaliatory measures.

Trump’s Tariff Pause

President Trump signed executive orders on Wednesday granting Canada and Mexico a one-month reprieve from some of the tariffs that had been set to take effect. The temporary exemption covers substantial portions of trade with America’s closest neighbors – roughly 38% of Canadian imports and 50% of Mexican goods entering the United States. This pause extends until April 2.

The partial temporary suspension follows conversations between Trump and Sheinbaum and Trudeau, who both advocated strongly for their countries to be spared from these duties. It’s not clear whether Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum agreed to additional conditions in exchange for the pause, but Trump has largely used the tariffs as part of an effort to push Canada and Mexico to crack down on the flow of fentanyl and illegal immigration. He previously delayed the start of tariffs back in February to March after Canada and Mexico agreed to take action on border issues. Trump has also delayed tariffs for automakers who operate under existing trade rules.

Trump changes course and delays some tariffs on Mexico and Canada https://t.co/t1byM9QZ4I

— Pittsburgh Post-Gazette (@PittsburghPG) March 7, 2025

North American Trade Tensions

Despite the temporary exemption, relations with Canada remain strained. Treasury Secretary Scott Bessent publicly criticized Prime Minister Trudeau, while President Trump himself accused the Canadian leader of using the tariff dispute for political advantage. The Canadian government had already begun removing some U.S. products from store shelves in anticipation of a trade war, a move that U.S. officials characterized as disproportionate. Meanwhile, Trudeau is reportedly considering delaying a second wave of retaliatory tariffs as negotiations continue. Trump also said on Friday that he may implement more tariffs for Canada on lumber and dairy as soon as the same day or early the following week.

For Mexico, the situation appears somewhat more favorable. Trump explained, “I did this as an accommodation, and out of respect for, President Sheinbaum,” acknowledging recent efforts against cartels and illegal migration. President Sheinbaum has won praise from U.S. officials for stepping up enforcement actions against transnational criminal organizations responsible for trafficking fentanyl into the United States.

Economic Impact and Market Response

The tariff announcements have triggered significant market volatility and business uncertainty. Major U.S. stock markets have fluctuated as investors attempt to gauge the impact of potential trade disruptions. Certain sectors appear particularly vulnerable, with the semiconductor industry facing considerable uncertainty. Meanwhile, automaker Stellantis has announced plans to increase U.S. production in response to the tariff situation, suggesting some companies are already adjusting their manufacturing strategies.

Economists have expressed concerns that implementing these tariffs could increase prices for American consumers, potentially slow economic growth, and cost jobs. Trump, however, has indicated that stock market performance is not a primary concern in this dispute. “A lot of them are globalist … companies that won’t be doing as well because we’re taking back things that have been taken from us years ago,” he said. “We’ve been treated very unfairly.”

China Tariffs Remain in Force

While Canada and Mexico received temporary relief, no such exemption was granted to China. Tariffs on Chinese goods remain firmly in place, and China has warned it is prepared to retaliate against what it characterizes as unfair trade practices. Major retailers like Walmart are already seeking price cuts from Chinese suppliers in anticipation of continued trade tensions. The administration appears particularly determined to address what it views as persistent trade imbalances with China, even as it offers temporary concessions to its North American partners.