Trump Suspends Most Mexico Tariffs Until April 2 Amid Trade Tensions

Washington: US President Donald Trump announced on Thursday that he is temporarily suspending tariffs on Mexican imports following discussions with Mexican President Claudia Sheinbaum. However, tensions with Canada remain high as both countries brace for further economic repercussions.

Trump clarified that the suspension applies only to trade under the United States-Mexico-Canada Agreement (USMCA) and will remain in effect until April 2. After this date, tariffs could be reinstated on both Mexican and Canadian goods.

"I did this as an accommodation, and out of respect for President Sheinbaum. Our relationship has been a very good one," Trump posted on Truth Social regarding the agreement.

His remarks starkly contrasted with his stance on Canada, as his recent talks with Canadian Prime Minister Justin Trudeau ended in frustration. Trump accused Trudeau of using the trade dispute for political gain, while Trudeau vowed to fight back.

Canada Responds: "Trade War Will Continue"

In response to Trump's decision, Prime Minister Justin Trudeau said that Canada is preparing for a long-term trade standoff with the US.

"Our goal remains to get these tariffs—all tariffs—removed. Even if there are breaks for certain sectors, the trade war will continue for the foreseeable future," Trudeau stated on Thursday.

The tariffs, which imposed a 25% duty on US imports from Canada and Mexico, have rattled global markets since they took effect earlier this week. Economists predict that American consumers will face widespread price increases as a result.

Temporary Relief for Automakers and Other Sectors

The US government has also granted temporary exemptions for certain industries, including the automobile sector, which has been severely impacted by the new tariffs.

The latest suspension follows widespread concerns from businesses and lawmakers over the potential economic fallout. The tariffs target a range of imports, from lumber to avocados, affecting multiple sectors across North America.

Tariffs Tied to Immigration and Drug Crackdown

Since returning to office in January, Trump has aggressively pursued tariff-based economic policies, arguing that trade restrictions are essential for stopping illegal immigration and curbing fentanyl trafficking.

However, Canadian and US government data show that Canada contributes less than 1% of the fentanyl entering the United States. Experts also note that tariffs alone are unlikely to address drug trafficking issues linked to China.

Despite global criticism, Trump remains firm on his stance, insisting that tariffs should serve as a key revenue source for the US government while addressing trade imbalances.

US Trade Deficit Hits Record High Amid Tariff Fears

The US trade deficit soared to a record $131.4 billion in January, driven by a 10% spike in imports, according to Commerce Department data released Thursday. This marks the largest trade deficit on record since 1992.

Analysts attribute part of this surge to companies stockpiling goods in anticipation of further tariffs. Some US businesses have been accelerating gold imports, reportedly in response to fears of additional economic uncertainty.

"Tariff threats are prompting a mass repatriation of gold holdings to the US, mostly via Switzerland," noted Pantheon Macroeconomics in a report.

Trump's Ongoing Trade Strategy

During his first term, Trump initiated a high-profile trade war with China, which resulted in billions of dollars in tariffs. Now, in his second term, he has expanded tariff policies to cover North American trade partners as well.

His administration is also considering new tariffs on semiconductors and automobiles, further escalating tensions with global trade partners.

With the April 2 deadline looming, economists and world leaders are closely watching whether Trump will extend the tariff pause or escalate trade restrictions once again.