Trump backtracks and postpones Canada, Mexico tariffs for a month

US President Donald Trump postponed 25% tariffs on various imports from northern and southern neighbours Canada and Mexico for a month as fears of an economic fallout from a broader trade war mount.

The White House insists that its tariffs aim to combat the smuggling of fentanyl and curb illegal migration into the United States. The taxes proposed by Trump however have caused a gaping wound in the decades-old North American trade partnership.

Trump’s tariff plans have also caused the stock market to plummet, alarming US consumers, but the 47th US president says he remains committed to his plans to impose “reciprocal” tariffs starting 2 April.

Imports coming into the US from Mexico will be exempt from the 25% tariffs for one month if they comply with the 2020 USMCA (UNITED STATES-MEXICO-CANADA Agreement) trade pact, according to the orders signed by Trump.

Imports from Canada – especially autos and auto parts – that comply with the trade deal, will also avoid the 25% tariffs for a month. Other Canadian products, including potash – which US farmers import – and Canadian energy products are to be tariffed at 10%.

Trump says the move was a “short term” manoeuvre to avoid hurting American car companies, and are not at all related to the market reactions, but offered no explanation on what happens next or what his plans are when the tariffs go back into effect in a month’s time.

“No, nothing to do with the market. I'm not even looking at the market because long term, the United States will be very strong with what's happening here. Now, these are countries and companies, foreign companies that have been ripping us off. And no president did anything about it until I came along. And then I did a lot about it,” said Trump.

Roughly 62%