US President Donald Trump postponed tariffs on Mexico for one month after last-minute talks on Monday, but there has been little progress in negotiations with Canada on an issue that has generated worries of a global trade war.
As global markets fell, Trump and his Mexican counterpart Claudia Sheinbaum both announced a halt to the tariffs after she agreed to send 10,000 troops to the US-Mexico border following negotiations on Monday.
Trump stated on his Truth Social network that during the “highly friendly discussion,” he “agreed to indefinitely pause the anticipated tariffs for a one-month period.”
During that period, there would be additional talks “as we attempt to reach a ‘deal’ between our 2 countries,” the Republican stated.
Leftist Sheinbaum , reported the tariff freeze a few minutes earlier, claiming that she had a “excellent meeting with President Trump with great admiration for our relationship and sovereignty.”
Donald Trump efforts to trafficking of US weapons into Mexico
Trump committed to strengthen efforts to prevent the trafficking of US weapons into Mexico, she added, a topic that was not included in Trump’s speech.
The development occurred just hours before Trump’s 25% tariffs on imports from the US’s neighbours and main trade partners — plus an additional 10% on China — were set to take effect at midnight on Tuesday.
Trump claimed he spoke with Canadian Prime Minister Justin Trudeau on Monday and was scheduled to call again at 3:00 p.m. (2000 GMT), but the White House said talks with Ottawa were not going nicely.
Donald Trump expressed
Trump expressed his frequent allegations that the United States is being treated unfairly in trade, while arguing that the tariffs were about a “drug war” caused by opioids “pouring through the Borders of Mexico and Canada.”
According to US official statistics, just a small percentage of drugs enter the country through Canada.
Trump claimed that last-minute talks between Washington and Beijing are likely to take place within the next 24 hours.
Trump stated that the negotiations would take place “probably over the next 24 hours.”
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Markets slump
Spiralling worries of a global trade war have previously sent US, European, and Asian markets down.
Wall Street stocks opened substantially lower, while Frankfurt and Paris led a European push lower, with falls of around two percent, while Asian share markets mainly declined after the close.
The Mexican peso and Canadian currency both fell against the US dollar, while oil rose despite Trump’s decision to limit the tariff on Canada’s energy imports at 10% in order to prevent a spike in gasoline costs.
The White House had stated that there had been a “heck of a lot of talks” over the weekend, with Mexico faring better than Canada.
“This is not an international trade war; it is a drug war,” said National Business Council Director Kevin Hassett on CNBC.
“The Mexicans are very, very concerned regarding doing what President Trump stated” in his directive imposing tariffs, he stated. “But the Canadians appeared to have misunderstood their simple language.”
Canada has promised to respond firmly to the levies.
Its most populous province, Ontario, blocked US corporations from competing on government contracts worth tens of billions of dollars on Monday and cancelled an agreement with Musk’s Starlink.
Musk is spearheading a cost-cutting campaign in Trump’s White House, which might lead to the closure of the US Agency for International Development (USAID).
“Ontario won’t do trade with people hellbent on hurting our financial system,” Ontario Premier Doug Ford stated on X.
Trump has recently stepped up the pressure, questioning Canada’s existence and pushing for it to become the 51st state of the United States on Sunday.
‘A little pain.’
The US president, who has called tariffs “a very wonderful word in the dictionary,” is going even further with taxes in his second term than he did in his first.
Despite the fact that most analysts believe otherwise, he has argued that the impact will be absorbed by foreign exporters rather than American consumers.
However, the 78-year-old billionaire acknowledged on Sunday that Americans may be experiencing economic “pain”.
“We may have some short-term pain, which people know,” Trump informed media as he returned to Washington on Sunday from a weekend at his Florida property.
“But for a long time, the United States has been ripped off by almost every nation in the globe.”
Trump has also used tariffs as a threat to achieve his larger policy objectives, most recently suggesting that he impose them on Colombia if it turned back US military planes transporting deported migrants.
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