Trump pauses Canada-Mexico tariffs again, but stocks sink
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President Trump signs executive orders in the Oval Office. Photo: Alex Wong/Getty Images
President Trump paused 25% tariffs on Mexican and Canadian imports covered by a North American trade pact until April 2.
Why it matters: It's the latest abrupt pivot in the Trump administration's trade policy, which is rattling businesses and consumers.
- Trump signed executive actions that said goods covered by the United States-Mexico-Canada Agreement (USMCA) — the deal negotiated in his first term — would get a temporary reprieve from tariffs.
- Most energy imports are not covered by the pact. Those goods will still be subject to 10% tariffs that took effect earlier this week, as will goods that face tariffs related to anti-dumping investigations.
The big picture: In the last month, the White House announced tariffs on incoming goods from Mexico and Canada that were later paused, imposed again and now paused once more.
- White House officials emphasized to reporters that the tariffs were implemented to push Canada and Mexico to choke the flow of fentanyl across the borders.
What they're saying: Commerce secretary Howard Lutnick said in a statement that the administration would still impose across-the-board reciprocal tariffs on April 2, actions that could impact Canada and Mexico.
- "Hopefully Mexico and Canada will have done a good enough job on fentanyl that this part of the conversation will be off the table and we will move just to reciprocal tariff conversation," Lutnick said.
The intrigue: The amendment adjusting the tariff plan acknowledges the potential damage of those levies to the auto industry, which trades parts across North American borders.
- The auto industry was the first to get a reprieve, just one day after the tariffs took effect.
- White House officials said the sector-specific pause that kicked off the broader tariff halt was not a result of the negative reaction across the stock market.
- Rather officials said that the pause came after the Big 3 automakers — Ford, General Motors, and Stellantis — committed to moving supply chains to the U.S.
Between the lines: The stock market has bounced up and down in recent days in response to reports about tariffs — generally falling on news of tariffs being imposed and rising on any headline about a pullback.
- But that pattern broke Thursday. Stocks not only remained in the red, but fell further after Trump posted to Truth Social about a pause.
- The S&P 500 closed down 1.8%.
What to watch: There is growing evidence that tariff uncertainty might jolt the global economy. Consumers have ramped up inflation expectations in the wake of tariffs.
- "The fact that the stock market goes up or down a half percent on any given day is not the driving force of our outcomes," Lutnick said in a statement.
Editor's note: This story has been updated with closing stock market statistics.
