President Trump said Thursday he is delaying until April 2 a 25% tariff on goods imported from Mexico and Canada that are covered by the trade pact he signed in his first term.
The announcement comes one day after he suspended the tariff on automotive products imported from both Canada and Mexico — and just two days after his tariffs took effect.
Trump initially said the delay would apply to Mexico, without mentioning Canada. “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,” Trump said in a social media post. “This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum.”
Before the White House announced that Canada would also be included, Trump criticized Canadian Prime Minister Justin Trudeau, repeating his accusation that the leader in Ottawa is the source of the problem and is trying to use it to his advantage. “Believe it or not, despite the terrible job he’s done for Canada, I think that Justin Trudeau is using the Tariff problem, which he has largely caused, in order to run again for Prime Minister,” Trump said. “So much fun to watch!”
Trudeau said he welcomed any delay in the tariffs but indicated that Canada’s retaliatory tariffs against the U.S. would likely remain in place until Trump’s threatened trade war is ended. The Canadian leader said he feared the disruption could continue for the foreseeable future.
Ontario Premier Doug Ford, who has announced a 25% export tax on electricity provided to roughly 1.5 million Americans in a handful of northern states, said he would reverse course only when all planned tariffs are rescinded. “This whole thing with President Trump is a mess,” Ford said. “This reprieve, we’ve went down this road before. He still threatens the tariffs on April 2.”
Canadian Foreign Minister Mélanie Joly spoke out against the tariff threat, as well, saying that Canada is not interested in going “through this psychodrama every 30 days.”
Record deficit: Trump reacted to a report Thursday that the total U.S. trade deficit rose to a record high of $131.4 billion in January, with imports rising 10% to $401.2 billion and exports climbing by 1.2% to $269.8 billion.
Economists are attributing the 34% increase in the trade deficit from the month before to Trump’s threat of a trade war, which has spurred U.S. firms to import key goods and manufacturing inputs before tariffs rise. Trump, though, blames his predecessor. “Massive Trade Deficit with the World, just announced, compliments of Sleepy Joe Biden!” he said. “I will change that!!!”
Messaging Wall Street: Commerce Secretary Howard Lutnick appeared on CNBC earlier in the day, reassuring viewers that the tariffs would likely be delayed. Lutnick talked up the tariffs, saying they are part of a larger plan to make America great again — a plan that will make it possible to rebuild the country and reduce the deficit and “balance the budget for the United States of America,” paid for by tariff revenues.
But the news of the tariff delay later in the day did little to ease concerns on Wall Street, and stocks fell sharply again, with the S&P 500 down 1.8%, adding to the damage done to investors by the ongoing threats of a trade war.
As Jessica Riedl, a fiscal expert at the conservative Manhattan Institute, wrote Thursday, “The Dow has now fallen 2,000 points in the 15 days since the trade war was expanded. The S&P is also down 6.5% over that period.” Riedl sarcastically noted the effects of the trade war: “But at least we can cushion the blow with higher prices, deepening job cuts, falling business investment, and export industry devastation.”
As he signed the order delaying the tariffs, Trump dismissed investor concerns entirely, admitting to reporters in the Oval Office that “globalist” companies may suffer under his new trade regime. “I’m not even looking at the market, because long term, the United States will be very strong with what is happening here,” he said. “This is very much about companies and countries that have ripped off this country, our country, our beloved United States. And they’re not going to be ripping us off anymore. So, you know, I think that has an impact on the market.”
The bottom line: Trump delayed tariffs against Mexico and Canada, but the threat of a trade war continues to roil markets as foreign leaders scramble to find a way to satisfy unclear U.S. demands.