Fabiola Sanchez, Rob Gillies, and Josh Boak, Associated Press
WASHINGTON As America’s two biggest trade partners took action to allay President Donald Trump’s fears about border security and drug trafficking, he agreed Monday to a 30-day halt on his tariff threats against Mexico and Canada.
After a turbulent few days that left North America on the verge of a trade war that might have stifled economic development, sent prices skyrocketing, and ruined two of the United States’ most important partnerships, the pauses offer a respite.
Canadian Prime Minister Justin Trudeau wrote on X Monday afternoon that his government would designate a fentanyl czar, designate Mexican cartels as terrorist organizations, and establish a Canada-U.S. Joint Strike Force to fight organized crime, fentanyl, and money laundering. He also said that proposed tariffs would be paused for at least 30 days while we work together.
Following a similar decision with Mexico that permits a period of negotiations over drug smuggling and illegal immigration, the White House acknowledged the delay to the United States.
There is a chance that the tariffs may still be implemented, which would leave the world economy unsure of whether a crisis has been avoided or if a potential disaster is still imminent in the coming weeks.
Trump ordered 25% tariffs on Canadian and Mexican imports on Saturday, along with an additional 10% duty on Canadian power, natural gas, and oil. Additionally, he mandated an extra 10% tax on Chinese imports.
The launch of all tariffs was set for Tuesday at midnight. The possibility of a wider regional trade war increased when Canada and Mexico threatened retaliation.
Despite Trump’s plans to meet with Chinese President Xi Jinping in the coming days, the 10% tax he ordered on China was still scheduled to take effect.
FILE: At The Grove hotel and resort in Watford, Hertfordshire, England, on December 4, 2019, U.S. President Donald Trump, left, and Canadian Prime Minister Justin Trudeau, right, converse prior to a NATO round table conference. The “proposed tariffs will be paused for at least 30 days while we work together,” Trudeau declared on Monday. (Frank Augstein, File/AP Photo)AP
Businesses, consumers, lawmakers, and investors were alarmed when Trump signed tariff orders for the three countries. Even though Trump has stated that import taxes are required to persuade other countries to curb illegal immigration, stop fentanyl smuggling, and treat the United States with respect, if they are maintained, they could raise costs and impede economic progress.
Following what Trump characterized on social media as a “very friendly conversation,” he said he looked forward to the next round of talks with Mexican President Claudia Sheinbaum, who declared a month-long suspension on higher tariffs against the United States.
As we try to reach an agreement between our two nations, I’m excited to take part in those talks with President Sheinbaum, the president posted on social media.
Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, Secretary of Commerce nominee Howard Lutnick, and senior Mexican officials would lead the negotiations, according to Trump. Sheinbaum announced that the U.S. government would pledge to work to prevent the trafficking of powerful weapons to Mexico and that she was bolstering the border with 10,000 troops of her nation’s National Guard.
The Mexican government declared in 2019 that it would deploy 15,000 troops to its northern border, avoiding tariffs imposed by the Trump administration.
However, Canada’s prospects were concerningly different for the majority of Monday before an agreement was reached.
Canada is not sure it can avoid the impending tariffs the way Mexico did, according to a senior Canadian official. Canada believes that the Trump administration is changing its demands for Canada more than it did for Mexico, which is why it is happening. Since the official was not permitted to talk in public, they spoke on condition of anonymity.
When asked what Canada could contribute to negotiations to avoid tariffs, Trump said, “I don’t know,” to reporters assembled in the Oval Office on Monday afternoon. He considered making Canada the 51st state.
“If we can’t make a deal with China, then the tariffs will be very, very substantial,” the U.S. president added, hinting to the possibility of more import levies against China.
Slightly beyond this bridge, Texas’ razor-wire-topped border fence stretches between El Paso and Sunland Park along the Rio Grande and the state’s border with New Mexico. The date is February 3, 2025.Guytan, Samuel | LoneStarLive.com
Trump will meet with Chinese President Xi Jinping in the coming days, and the White House will report on the meeting, White House press secretary Karoline Leavitt informed reporters.
In recent weeks, Trump’s hostility toward Canada has persisted. Despite decades of friendship and collaborations that span from World War II to the reaction to the 9/11 terrorist attacks, he reiterated his grievances on Monday via a social media post that Canada has not cooperated.
Trump wrote, “Canada doesn’t even permit U.S. banks to open or do business there.” What is the purpose of that? There are many such things, but it’s also a drug war, and drugs crossing the Canadian and Mexican borders have killed hundreds of thousands of Americans.
Businesses, consumers, and financial markets are attempting to get ready for the potential additional tariffs. The minor decline in stock prices indicated some optimism that the import levies, which have the potential to increase inflation and impede international trade and growth, would not last long.
However, the perspective revealed a great deal of skepticism regarding a Republican president who has spoken eloquently about tariffs and even claimed that the United States government erred in 1913 when it shifted to income taxes as its main source of funding.
Despite the anticipated retaliations and potential for escalation, White House National Economic Council director Kevin Hassett stated Monday that it was inaccurate to refer to the conflict as a trade war.
According to Hassett, read the executive order in which President Trump made it very evident that this is not a trade war. It’s a drug battle.
Trump’s own comments, however, have frequently focused more on his apparent belief that other nations are taking advantage of the United States by running trade surpluses, even if the orders are centered on illegal drugs. Trump declared on Sunday that taxes on EU nations would soon be implemented. He has talked about tariffs as a means of renegotiating current trade agreements, raising money, and using them as a diplomatic tool on matters of national security.
Trump has stated that there will be some short-term pain following his campaign last year on the promise that he could control inflation, and several economists outside the administration have cautioned that the tariffs would raise costs and impede growth.
Snchez reported from Mexico City, while Gillies reported from Toronto.
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