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Update: President Donald Trump also deferred duties on Canadian goods covered under USMCA until April 2, signing an executive order Thursday afternoon.
Mexican President Claudia Sheinbaum has talked President Donald Trump into walking back 25-percent duties on her country just two days after they were implemented.
Taking to his platform of choice Thursday morning, Trump declared on Truth Social that Mexico will not have to pay tariffs on any products that fall under the U.S.-Mexico–Canada Agreement (USMCA)—including an array of footwear, apparel and textile products.
The truce will remain in place until April 2, when Commerce Secretary Howard Lutnick is slated to provide the president with reporting on America’s global trade agreements and trade deficits from multiple government agencies.
“I did this as an accommodation, and out of respect for, President Sheinbaum,” Trump wrote. “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.”
Mexico’s government has deployed robust enforcement mechanisms in recent weeks to combat the flow of drugs into the U.S., sending 10,000 members of its National Guard to patrol popular thoroughfares for drug trafficking. The country has also taken in 20,000 deportees from the U.S. since Trump took office on Jan. 20.
Since September, U.S. Customs and Border Protection (CBP) has intercepted 7,793 pounds of fentanyl entering the country, 98 percent of which was seized at the Southwest border. The lethal synthetic narcotic is made largely with precursor chemicals imported from China, which was also hit with new duties this week for its role in the drug trade.
“We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results, within the framework of respect for our sovereignties,” Sheinbaum wrote of her conversation with Trump in a post on X. “We will continue working together, particularly on issues of migration and security,” she added.
Lutnick has hinted in recent days, and reiterated Thursday, that a similar deferral deal with Canada is likely forthcoming and could take shape as soon as Thursday afternoon.
But in a sharp contrast to his budding collaborative relationship with Sheinbaum, Trump’s animus for outgoing Canadian Prime Minister Justin Trudeau seems only to have deepened in recent weeks.
“Believe it or not, despite the terrible job he’s done for Canada, I think that Justin Trudeau is using the Tariff problem, which he has largely caused, in order to run again for Prime Minister. So much fun to watch!” Trump Truthed shortly after announcing the deal with Mexico.
Trudeau, whose approval ratings were already on a decline before Trump took aim at Canada, was criticized by both liberal party allies and conservative adversaries for his tepid response to the president’s gibes and threats. The Canadian leader announced his intention to step down in early January.
As Trump’s insults and intimidation have escalated, however, so too have Trudeau’s rhetoric and retaliatory actions. Following the implementation of duties on Tuesday, he imposed duties on $155-billion worth of U.S. products, including finished apparel and textiles, $30 billion of which took effect immediately, and $125 billion of which will be rolled out in the next 20 days.
Trudeau spoke directly to the American people, saying, “We want to work with you as a friend and ally, and we don’t want to see you hurt either. But your government has chosen to do this to you.”
“As of this morning, markets are down and inflation is set to rise dramatically all across your country,” he added.
Markets tanked Monday after Trump announced his intention to move forward with the duties, with shareholders anticipating the impacts of lost sales as well as the effects of inevitable retaliation from the trade partners. They rallied slightly Wednesday, when Trump announced that U.S. auto makers would see exemptions on necessary inputs from Canada and Mexico.
On Thursday, however, the Dow Jones Industrial Average slid by 1 percent (about 450 points), and the S&P 500 fell 1.7 percent. This week, the Federal Reserve Bank of Atlanta released forecasting showing that gross domestic product (GDP) is projected to decline by an annualized 2.8 percent in the first quarter of 2025, an about-face from the 3-percent growth predicted in early February.
