President Donald Trump on Thursday paused tariffs on Mexican and Canadian goods that comply with the U.S.-Mexico-Canada Agreement (USMCA), granting a reprieve to America’s two largest trading partners.
Trump signed an order modifying the tariffs he put in place earlier in the week, which placed a 25 percent duty on imports from both countries. Under the revised policy, goods that comply with the USMCA will be exempt from the tariffs, a move designed to incentivize North American production while ensuring compliance with trade commitments.
The exemption is set to last until April 2, when the administration is scheduled to announce a plan for sweeping, worldwide reciprocal tariffs on countries that impose tariffs and non-tariff barriers on U.S. goods.
The move to modify the tariffs was first unveiled by Commerce Secretary Howard Lutnick in an interview with Fox Business’ Larry Kudlow.
“Both the Mexicans and the Canadians were on the phone with me all day today, trying to show that they’ll do better. And the president’s listening because, you know, he’s very, very fair and very reasonable,” Lutnick said Tuesday. “I think he’s going to work something out with them. It’s not going to be a pause, none of that pause stuff but I think he’s going to figure out, you do more, and I’ll meet you in the middle some way.”
The decision follows discussions between Trump and Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, as well as meetings with auto executives from Ford, GM, and Stellantis. The White House indicated that the delay reflects growing cooperation from Mexico and Canada on border security and fentanyl trafficking—key priorities for the administration.
“They’ve been working much harder lately, do you notice that? On people coming in and drugs,” Trump said in the Oval Office, emphasizing recent progress on both issues. Commerce Secretary Howard Lutnick echoed that sentiment, stating that both nations had stepped up enforcement efforts against fentanyl trafficking, a major concern for the administration.
Trump announced the tariff delay on Truth Social.
“After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA Agreement. This agreement is until April 2nd,” Trump said on his Truth Social account.
He further noted that he granted the exemption “out of respect” for Sheinbaum. Notably, Trump did not mention Canada in his social media post.
While some media outlets framed the delay as a response to market volatility, Trump rejected that notion outright.
“No, nothing to do with the market. I’m not even looking at them… long term, the United States will be very strong with what’s happening here,” Trump said, underscoring his focus on trade policy rather than short-term stock fluctuations, in response to questions from reporters in the Oval Office.
The temporary tariff reprieve will cover automobiles and parts that meet USMCA requirements, a policy shift announced earlier in the week. Detroit’s Big Three automakers had lobbied for relief, arguing that tariffs would raise production costs and risk job losses. They told the president that the tariffs would disrupt North America’s deeply integrated auto supply chain. Trump granted the exemption but made clear it is temporary, warning auto executives that they should not expect further extensions.
“I told them that’s it, this is a short-term deal,” Trump said.
Other industries will still be affected. Energy products from Canada will face a 10 percent tariff, while 62 percent of Canadian imports and about half of Mexican imports that are not compliant with the USMCA’s rules will still be subject to tariffs, according to the White House. The administration has also confirmed that tariffs already paid will not be refunded.
The temporary exemptions will expire on April 2, when Trump is expected to roll out broader reciprocal tariffs on other trading partners and sector-specific duties aimed at reducing America’s trade deficit and convincing other countries to lower their tariffs. Trump has long argued that U.S. trade partners benefit disproportionately from American economic strength, and he is using tariffs as a negotiating tool to rebalance global trade relationships.
The move came as Treasury Secretary Scott Bessent spoke to the Economic Club of New York, laying out the administration’s vision for trade and economic policy.
“Access to cheap goods is not the essence of the American Dream,” Bessent said.
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