President Trump Monday put his plan for 25% tariffs on all imports from Mexico on hold for a month after a productive discussion with Mexican president Claudia Sheinbaum, even as he insisted the similar tax on Canadian imports would go into effect as planned overnight.
“(We) agreed to immediately pause the anticipated tariffs for a one month period during which we will have negotiations … as we attempt to achieve a ‘deal’ between our two Countries,” Trump wrote on his social media site.
Markets rebounded sharply as investors bet that Trump’s bark may be worse than his bite on tariffs.
Sheinbaum said Mexico agreed to send 10,000 troops to its border with the U.S. to help stem the flow of undocumented immigrants and battle drug trafficking.
Canadian Prime Minister Justin Trudeau was set to talk to Trump later in the afternoon in hopes of averting the huge tax that would send prices skyrocketing for American consumers on a wide range or products.
Canadian officials had earlier said they were pessimistic about reaching a deal with Trump, in part because he hasn’t laid out any clear demands and the north of the border ally is responsible for only a tiny fraction of the undocumented immigration and illicit drugs that flow into the U.S.
Trudeau Sunday night laid out an aggressive package of Canadian tariffs on American-made products, especially those made in pro-Trump states, like Kentucky bourbon.
Trump also has vowed to also impose a 10% tariff on imports from China effective Tuesday.
The White House has not explained why it plans to impose a much heftier tax on imports from America’s allies and close trading partners than its main global economic rival.
China is the world’s manufacturing powerhouse and is better able to absorb the shock of tariffs because it sends a smaller share of its products to the U.S., compared to Canada and especially Mexico.
Markets bounced back sharply on news of the deal with Mexico after plunging sharply at the opening bell.
