U.S. strikes deals to pause Mexico, Canada tariffs for 30 days
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President Trump in the Oval Office. Photo: Chip Somodevilla/Getty Images
The U.S. struck deals with Canada and Mexico on Monday to delay potentially devastating tariffs for a month.
Why it matters: The tariffs, had they gone into effect, could have had massive impacts on the economies of all three nations, potentially triggering inflation, recessions and a spiraling trade war.
- It marks the second time in this presidency Trump vowed a massive and disruptive tariff on a long-time ally, only to quickly freeze it after gaining some concessions.
Catch up quick: Trump originally signed the tariff orders Saturday — 25% on Canada and Mexico (10% on energy), and 10% on China as well.
- They were due to take effect at 12:01am ET Tuesday.
Zoom out: Trump announced a deal with Mexican President Claudia Sheinbaum via Truth Social post early Monday, and in the afternoon Canadian Prime Minister Justin Trudeau confirmed a deal on social media as well.
- Mexico will send 10,000 troops to the border to help control the flow of drugs, and in return the U.S. will help to prevent gun trafficking to cartels.
- The deal with Canada, per Trudeau, includes more border personnel and hundreds of millions of dollars in anti-fentanyl enforcement.
- Both the Canadian dollar and the Mexican peso rallied significantly against the U.S. dollar, which is strengthened by tariffs.
Zoom in: Trump took both deals as wins, touting them on Truth Social and promising further negotiations over the next month — though he did not say what the final goals of those talks would be.
Between the lines: Sheinbaum's move in particular came as little surprise to White House officials, one of whom told Axios on Sunday that a show of force at the border would positively impact Trump.
- "If she sends troops, it's a sign Mexico takes the president seriously," the official said.
- As for Trudeau, the official said, "bust some fentanyl labs. Make progress."
The big picture: The economic consequences of the tariffs could have been profound for all three countries.
- Economists feared they could have plunged both Mexico and Canada into recession, while American consumers stood to face a significant increase in costs and erosion of purchasing power.
Editor's note: This story has been updated with new details on the tariff deals.
