Donald Trump pauses most tariffs on Canada and Mexico for one month

The US will pause tariffs on goods from Mexico and Canada that comply with the North American free trade pact until April 2, just days after it slapped 25 per cent tariffs on the US’s two largest trading partners.

The US will pause tariffs on goods from Mexico and Canada that comply with the North American free trade pact until April 2, the White House said on Thursday, just days after it slapped 25 per cent tariffs on the US’s two largest trading partners.

The exemption will cover about half of the imports from Mexico and about 37 per cent of imports from Canada, said a White House official, adding that much of the Canadian imports are energy products, which received a 10 per cent tariff, instead of 25 per cent.

The official said Mr Trump’s decision to grant the tariff reprieve came after meetings with the CEOs of Ford, GM and Stellantis, where the auto companies committed to move supply chains back from Mexico and Canada to the US. The tariff exemptions will not be retroactive, the White House said, meaning that any tariffs already paid since Tuesday will not be refunded to companies.

But President Trump, speaking in the Oval Office, said that steel and aluminum tariffs were on track for next week, with no modifications.

Trump also told reporters that he still intended to impose reciprocal tariffs on April 2, calling it the “big one.”

Mr Trump had previously told Anthony Albanese that he would reconsider sweeping 25 per cent import duties on Australian steel and aluminium, with Australia previously ducking the tariffs during the first Trump administration in 2017.

President Trump said he wanted the US to be more “self-sustaining” to avoid paying tariffs on goods such as lumber from Canada.

Trump said he plans to sign an executive order loosening environmental regulations to increase the lumber supply in the country.

“We don’t need trees from Canada,” he told reporters in the Oval Office. “We don’t need cars from Canada. We don’t need energy from Canada. We don’t need anything from Canada.”

Mr Trump has agreed to roll back tariffs on the majority of Mexican goods until April 2 in another concession in his new trade war, with the move coming one day after the US President granted the three big US automakers a similar 30 day reprieve.

After speaking with Mexican President Claudia Sheinbaum, Mr Trump revealed on his Truth Social platform on Thursday morning local time that he had agreed to cut Mexico a deal.

The country would not be required to pay tariffs on “anything that falls under the USMCA (United States-Mexico-Canada) Agreement.”

“This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum. 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,” Mr Trump said. “Thank you to President Sheinbaum for your hard work and co-operation.”

Ms Sheinbaum also posted on her social media account thanking Mr Trump, saying that “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.”

“We will continue to work together particularly on migration and security issues, which include reducing the illegal crossing of fentanyl into the United States, as well as weapons into Mexico,” she said. “As mentioned by President Trump, Mexico will not be required to pay tariffs on all those products within the USMCA. This agreement is until April 2, when the United States will announce reciprocal tariffs for all countries.”

Earlier in the day, US Commerce Secretary Howard Lutnick said goods and services compliant with the USMCA trade pact would “likely” receive a one-month exclusion from Trump’s tariffs.

Meanwhile, after a “colourful” phone conversation with Canadian Prime Minister Justin Trudeau, Mr Trump accused him of using the tariffs in an attempt to run for the leadership again.

“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!” Mr Trump posted on his Truth Social site.

Mr Trudeau said his country would remain in a trade war with the United States for “the foreseeable future” even if there are “breaks for certain sectors”.

“Our goal remains to get these tariffs, all tariffs removed,” Mr Trudeau said, a day after the urgent call with Mr Trump to try to avoid plunging the two neighbours into what he called an “unjustified” trade war.

Discussions with the Trump administration were ongoing, he added. “As I’ve said a number of times, we will not be backing down from our response tariffs until such a time as the unjustified American tariffs on Canadian goods are lifted,” he said.

And so, he added, “we will continue to be in a trade war that was launched by the United States for the foreseeable future.”

On Tuesday, Mr Trump made good on his promise to slap 25 per cent tariffs on Canadian and Mexican imports into the United States.

Canadian oil shipments were hit with lower 10 per cent duties. Ottawa immediately hit back with counter tariffs on $30 billion worth of American products, which is set to rise to $155 billion.

Mr Trudeau spoke for almost an hour with Mr Trump on Wednesday, describing their discussion “colourful, but substantive.”

Mr Trump however concluded that Canada’s efforts to curb migrants and fentanyl coming into the United States were insufficient, which he has linked to his tariffs.

At the same time, he granted a one-month exemption for the auto sector, which is highly integrated across Canada, the United States and Mexico, at the request of American manufacturers.

Mr Trudeau said the one-month delay on tariffs to Mexico was a “a promising sign”, adding “but it means that the tariffs remain in place, and therefore our response will remain in place.”

With AFP