In dizzying reversal, Trump pauses tariffs on some Mexican and Canadian products
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- On Tuesday, the U.S. began placing duties of 25% on imported goods from Mexico and Canada.
- Trump said the tariffs will be delayed one month.
- A Mexican newspaper columnist likened Trump to the boy who cried wolf.
MEXICO CITY — The on-again, off-again threat of U.S. tariffs on goods from Mexico and Canada took another dizzying turn Thursday, when President Trump declared that Washington would temporarily reverse some of the sweeping taxes that he had imposed just two days earlier.
In a post on his social media site, Trump said he would pause for one month the imposition of 25% taxes on Mexican and Canadian imports that fall under the free trade accord — the United States-Mexico-Canada Agreement — that he negotiated during his first term.
The tariffs — which Trump originally had vowed would go into effect as soon as he took office in January — were enacted Tuesday after twice passing previous deadlines.
Pascal Beltrán del Río, a columnist for Mexico’s Excelsior newspaper, compared Trump to the boy who cried wolf.
The bewildering tariff discourse has agitated international markets and caused deep disquiet in Canada and Mexico, which are both highly dependent on cross-border trade.
It also has triggered alarm in U.S. industries, including the automotive and agricultural sectors. In his address to a joint session of Congress on Tuesday, even Trump said his tariffs would be felt on the U.S. side of the border, referring to their effects as “a little disturbance.” Detroit automakers, with a massive presence in Mexico and Canada, have strongly urged Trump to pull back the tariff plan.
Thursday’s news probably will calm markets and U.S. consumers worried about higher prices for cars, food and other imported products.
Still, experts said Trump’s unpredictability was expected to continue to unnerve investors, who have been loath to make decisions about where to locate factories, whether to hire new employees and which suppliers to rely on amid the ever-changing tariff landscape. “It’s total uncertainty,” said Pamela K. Starr, a professor of international relations at USC.
At the U.S.-Mexico border Thursday, there was a sigh of relief.
Trump’s short-lived tariffs had prompted many exporters on the Mexican side to hold off on sending products north, said Israel Delgado Vallejo, vice president of a Mexican cargo association. In the border town of Nuevo Laredo, opposite Texas, trade to the U.S. had fallen by about 80%, he said. In Ciudad Juárez, which is just south of El Paso, trade had dropped by 50%, and in Tijuana, by 35%.
“The prevailing enemy is uncertainty,” Delgado said. “It’s difficult to plan when we don’t have a clear picture in front of us.”
Before announcing the pause in tariffs on Thursday, Trump had already said there would be an exemption for Canadian vehicles and auto parts imported under the tri-national trade deal.
Canadian Prime Minister Justin Trudeau called the American tariffs “really dumb” and immediately imposed tariffs on some U.S. goods, many from red states. Mexican President Claudia Sheinbaumdeclined to specify how Mexico would retaliate.
Trump said that his latest decision on tariffs was made after a telephone call with Sheinbaum on Thursday morning. In his social media post, Trump spoke of his “respect” for the Mexican leader and praised her “hard work and cooperation.”
“Our relationship has been a very good one, and we are working hard, together, on the Border, in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl,” Trump said.
Unable to seek asylum in the U.S. because of President Trump’s crackdown on immigration, thousands of migrants are applying for asylum status in Mexico.
Trump has cited shifting rationales — illegal immigration, a growing U.S. trade deficit with Mexico — for imposing tariffs, but lately has focused on the smuggling from Mexico of fentanyl, the synthetic opioid that has caused tens of thousands of overdose deaths in the United States.
A clearly relieved Sheinbaum said at a news conference Thursday that she had presented Trump with data documenting Mexico’s recent success in reducing drug trafficking and illicit immigration.
China has begun to challenge U.S. hegemony in Latin America. The chaos of the Trump presidency may present it a new opportunity.
“It was a very, very, respectful conversation,” Sheinbaum said. “All within the framework of cooperation and the respect of our sovereignty.”
The tariff reprieve applies only to merchandise exported under the existing trade pact. Sheinbaum said the vast majority of goods exported to the United States fall under the terms of the accord.
The minority of merchandise that will still be taxed probably will include vehicles from some Asian carmakers that are finished in Mexico but aren’t at least 75% made in North America.
Many experts had predicted that the Trump tariffs, if enacted, would throw Mexico’s already sluggish economy into a full-fledged recession. The latest delay has bought Mexico some time, but observers say there is no guarantee that Trump will not reinstate trade levies.
President Trump has turned Canada into a punching bag. In response, a Canadian boycott on U.S. goods is gaining ground.
Trump has vowed to impose wide-ranging “reciprocal” tariffs April 2 to match the taxes and subsidies that other nations charge on U.S. products.
Since “practically all of the trade” between Mexico and the U.S. falls under the existing free-trade regimen, Sheinbaum said Mexico hopes to escape any new U.S. levies for its products.
However, experts have warned that Mexico could be penalized for the 16% value-added tax that it imposes on many transactions, including sales of foreign products.
The Mexican president, who took office in October, has generally earned high marks for navigating the delicate high-wire act of trying to mollify Trump — and talk him out of the tariff notion — while not alienating her nationalist base, which is wary of any perceived U.S. intervention.
‘There will not be submission,’ President Claudia Sheinbaum said Wednesday, adding she hopes to speak to Trump this week. ‘Mexicans are valiant and strong.’
Still, the tariffs — however short-lived — will have a major economic fallout for Mexico, said Starr, the USC expert.
Mexico is the United States’ leading trading partner, and last year exported more than $500 billion in merchandise — including vehicles, computers, oil and gas — to its northern neighbor. But uncertainty around tariffs has scared off investors, Starr said.
“New investment in Mexico will remain stagnant, and that’s a real problem for Mexican growth,” she said, noting that the nation’s economy is now not expected to grow at all in the coming year.
Trump’s about-face followed comments from U.S. Commerce Secretary Howard Lutnick, who on Thursday said in a television interview that Trump was “likely” to temporarily suspend 25% tariffs on Canada and Mexico for most products and services, widening an exemption that was granted Wednesday only to vehicles.
In Canada, Trudeau said he welcomed news that the U.S. would delay taxes on imports from his country, but said some retaliatory tariffs by his country will remain in place for now. “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.
The Associated Press reported that an initial round of tariffs by Canada on U.S. goods — totaling $21 billion — would remain in effect. A second round of such tariffs, totaling $87 billion and set to take effect in coming weeks, was suspended, AP reported.
As tariffs take effect, farmers fear retaliation from other countries will impede their exports and drive up costs of production.
Trudeau told reporters that the U.S. and Canada are “actively engaged in ongoing conversations in trying to make sure these tariffs don’t overly harm” certain sectors and workers.
China and Canada responded forcefully to Trump’s imposition of tariffs this week, as both placed retaliatory tariffs on U.S. goods. Sheinbaum had said that Mexico also would respond with counter-tariffs, and had planned to announce them Sunday at a public rally in Mexico City.
But that announcement would now be a “party,” Sheinbaum said Thursday, after Trump’s decision to push back the tariffs. “We’re having a festival so we can all be happy on Sunday,” said a smiling Sheinbaum.
Times special correspondent Cecilia Sánchez Vidal in Mexico City contributed to this report.
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