Donald Trump has backtracked on part of his trade war following chaos on Wall Street. The US President confirmed on Thursday Mexico has been given a one-month reprieve from new tariffs on goods including clothing and textiles and agricultural products.
Writing on his Truth Social platform, Mr Trump said the delay is until April 2 and that he “did this as an accommodation, and out of respect for, President Sheinbaum”. The announcement comes after the US commerce secretary Howard Lutnick said it is “likely” the President will suspend 25% tariffs on both Canada and Mexico for most products and services for one-month. Mr Trump did not mention Canada.
Mr Lutnick told CNBC the delay in the import taxes “will likely cover all USMCA [US-Mexico-Canada Agreement]-compliant goods and services”, estimating more than half of what the US imports from Canada and Mexico would be eligible for exemption.
Carmakers were already given a one-month reprieve from the tariffs earlier this week.
Mr Lutnick also said if the two countries don’t make enough progress limiting the shipment of fentanyl into the United States, the 25% tariffs could be re-applied in a month as well.
The President said Washington and Mexico are “working hard, together” to stop fentanyl from entering the US.
Recipriocal tariffs, in which the US applies import taxes on countries that tariff American exports, are still be expected to be implemented on April 2.
Mr Trump is a big believer in tariffs and they are a crucial part of his economic plan, believing they will boost the US economy and create jobs.
His on-again, off-again tariffs threats have roiled financial markets and lowered consumer confidence.
US stocks nosedived earlier this week following Mr Trump’s announcement he would reimpose tariffs on Canada and Mexico and withdraw US aid to Ukraine.
Stocks racked up more losses on Wall Street Tuesday as the trade war between the US and its key trading partners escalated, wiping out all the gains since Election Day for the S&P 500 index.
Canadian Prime Minister Justin Trudea hit out the 25% tariffs as “a very dumb thing to do” and on Thursday said he expects Canada and the US to be in a trade war for the foreseeable future.e
He said the month-long pause “aligns with some of the conversations that we have been having with administration officials.”
He described the move as a ” promising sign” but added it also “means that the tariffs remain in place and therefore our response will remain in place”.
The US has also imposed 20% tariffs on all imports from China.
China‘s commerce minister said on Thursday there are “no winners in a trade war”.
