In a dramatic last-minute decision, former U.S. President Donald Trump announced a one-month delay in the implementation of 25% tariffs on Mexican and Canadian exports after both countries agreed to reinforce their border security measures. The move, aimed at curbing illegal immigration and fentanyl trafficking, comes after intense negotiations with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum.
Border Security Commitments from Mexico and Canada
Trump confirmed that Mexico had agreed to deploy 10,000 troops to the U.S.-Mexico border to control migrant movement. Following “very friendly” discussions with Sheinbaum, Trump declared that tariffs on Mexico would be paused immediately.
Meanwhile, tensions with Canada ran higher. However, after two separate calls with Trudeau, Trump agreed to a 30-day postponement of tariffs. Canada has pledged to:
- Deploy nearly 10,000 border officers to bolster security.
- List drug cartels as terrorist organizations.
- Appoint a “Fentanyl Czar” to combat the deadly drug trade.
- Crack down on money laundering operations linked to drug trafficking.
Despite this, reports indicate that Canada already had 8,500 personnel stationed at its border, raising questions about the actual impact of Trudeau’s new commitments.
Market Reactions and Global Trade Impact
The tariff threats sent shockwaves through global financial markets, with stocks across Wall Street, London, Paris, and Frankfurt experiencing losses. Although U.S. stock indices recovered slightly after the Mexico deal was announced, uncertainty persists.
The Mexican peso and Canadian dollar fell against the U.S. dollar, while oil prices surged. Trump opted to limit tariffs on Canada’s energy exports to 10% to prevent an excessive spike in fuel costs.
China and the EU in the Crosshairs
While Canada and Mexico secured temporary relief, Trump’s trade war with China remains unresolved. He warned that an additional 10% tariff on Chinese imports was still under consideration. Trump also hinted that the European Union and Britain could be next in line for tariff measures.
A last-minute U.S.-China meeting was expected to take place within 24 hours to negotiate and potentially avoid further economic confrontation.
Canadian Retaliation and Political Fallout
Canada had vowed strong retaliation if the tariffs were imposed. In a bold move, Ontario banned U.S. firms from bidding on multi-billion-dollar government contracts and canceled a deal with Elon Musk’s Starlink, a company closely aligned with Trump.
Adding fuel to the fire, Trump mockingly suggested Canada should become the 51st U.S. state. His escalating trade pressures have also created political turmoil within Canada, forcing Trudeau to announce his resignation earlier this month. Canadians are now set to vote in early elections, possibly as soon as April.
Trump’s Tariff Strategy and Economic Concerns
Throughout his presidency, Trump has consistently championed tariffs as an economic weapon, once declaring that “tariff is the most beautiful word in the dictionary.” In his second term, he is taking an even more aggressive approach than before.
Despite his insistence that foreign exporters—not American consumers—will bear the costs, economists warn that tariffs could lead to higher prices for U.S. citizens. Trump himself admitted, upon returning from his Florida resort, that Americans might experience economic “pain” due to his trade policies.
Beyond North America, Trump has also used tariffs as a diplomatic tool, recently threatening Colombia with trade penalties after it refused to allow U.S. military planes carrying deported migrants to land.
With ongoing tensions between major global economies, all eyes remain on Trump’s next moves as negotiations with China, Canada, and Mexico continue.
ALSO READ: US Deports Illegal Indian Immigrants Amid Immigration Concerns