- Mexican and Canadian goods will be exempt for a month.
- For Canada, Trump has a sculpture for the potash.
- The three countries are members of the North American commercial pact.
President Donald Trump suspended the 25% tariffs he imposed on Thursday that he imposed this week on Canada and Mexico, the last touch of a fluctuating commercial policy that whipped the financial markets and the stretch concerns about inflation and a slowdown in growth.
The exemptions, covering the two largest American trade partners, expired on April 2 when Trump threatened to impose a global regime of reciprocal rates on all American trade partners.
Trump had imposed a 25% levy on imports from the two countries on Tuesday and only mentioned an exemption for Mexico earlier Thursday, but the amendment he signed on Thursday afternoon also covered Canada. The three countries are partners of a North American commercial pact.
In response, Canada will delay a second planned wave of reprisals out of $ 125 billion in American products until April 2, said Finance Minister Dominic Leblanc, in a position on X.
For Canada, the order of the modified White House also excludes tasks on the potash, a critical fertilizer for American farmers, but does not fully cover energy products, on which Trump has imposed a separate 10%tax. A White House official said that all of Canada’s energy products are not covered by the American-mexico-Canadian Agreement on the trade that Trump negotiated during his first mandate as president.
Trump imposed the prices after declaring a national emergency on January 20, his first day in power, due to the deaths of fentanyl, saying that the deadly opioid and his chemical precursors are making their way from China to the United States via Canada and Mexico. Trump also imposed 20% prices on all imports from China.
Trump announced the samples for the first time in early February, but he delayed them for Canada and Mexico until Tuesday. Earlier this week, he refused to delay them again and doubled a 10% tax that had been in effect since February 4 on Chinese imports.
“On April 2, we are going to move with reciprocal prices, and I hope that Mexico and Canada will have done a fairly good job on the fentanyl so that this part of the conversation is outside the table, and we will go to the reciprocal tariff conversation,” said the secretary of commerce Howard Lutnick CNBC. “But if they did not do it, it will remain on.”
Trump also said that 25% of prices on steel and aluminum imports come into force as planned on March 12. Canada and Mexico are both the main exporters of metals to American markets, Canada being in particular explaining most aluminum imports.
Trump on Wednesday exempt car automobile products from the 25% prices which he imposed on imports from Canada and Mexico on Tuesday, samples that economists considered to be threatening inflation and the winning growth in the three economies.
Trump published these exemptions after meeting leaders of the best American automakers, Ford, General Motors and Stellantis.
No market membership
The US stock markets resumed their recent sale on Thursday, investors citing rapid and downstream developments in prices as a concern because of the uncertainty they are fanning. Economists have warned that the samples could revive inflation which has already proven to be difficult to fully bring to the heel, and slow demand and the growth of its wake.
The S&P 500 decreased by 1.8% and is now down by almost 7% since mid-February.
“A continuation of this again, again with prices, in particular with Mexico and Canada” is what creates an uncertainty in the markets, said Bill Sterling, a global strategist at GW & K Investment Management in Boston.
“The rational economic response to business leaders when there is such a high degree of uncertainty is to sit on their hands and postpone decisions to be made,” said Sterling. “How can you make decisions about where you locate a automotive factory between the United States and Canada at the moment?”
Lutnick said the White House was not trying to market the reaction to get advice.
“The fact that the stock market increases or decreases half a pourcentage one day given is not the driving force of our results,” said Libnick. “Our results are motivated by we want factory production in America.”
Earlier Thursday, Prime Minister Justin Trudeau, who moves on Sunday as head of Canada, said that he did not expect the trade war that Trump had launched to decrease anytime soon.
“I can confirm that we will continue to be in a trade war launched by the United States in the predictable future,” he told journalists in Ottawa.
There was no immediate response from Mexican officials, although President Claudia Sheinbaum was earlier Thursday with Trump during which he had accepted a delay.
“We had an excellent and respectful call in which we agreed that our work and our collaboration have given unprecedented results, in the context of respect for our sovereigns,” said Sheinbaum in an article on X.
Mexican and Canadian officials were frustrated by pricing negotiations with Trump administration, with a lack of clarity on American desires that make resolution seems impossible, the sources of the two countries have declared Reuters.