Trump Postpones Tariffs on Canada and Mexico after Border Security Deals are Made

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Key Points

US President Donald Trump has delayed new tariffs against Mexico and Canada for one month.
Both countries agreed to strengthen their borders with the US to curb illegal drug trafficking.
A tariff is still set to be imposed on China, but the White House says Trump will speak with Xi Jinping this week.

Canadian Prime Minister Justin Trudeau says the United States’ plan to impose a 25 per cent tariff on the majority of its exports to the US has been paused for 30 days, shortly after a similar deal was reached between the US and Mexico.

Tariffs had been against both Canada and Mexico, along with an additional 10 per cent on current duties from China.

US President Donald Trump had argued the tariffs would pressure the major trading partners to block illegal immigration and the flow of illegal drugs — in particular, the synthetic opioid fentanyl — into the US.

Trudeau said in a post on X on Tuesday (AEDT) that after a “good call” with Trump, Canada would reinforce their border with “new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl”.

Donald Trump and Justin Trudeau speaking to each other in front of a blue background.

Donald Trump and Justin Trudeau in 2019. Trudeau says Canada will reinforce its border and appoint a ‘fentanyl czar’ in efforts to stop the flow of illegal drugs to the US. Source: AAP / Frank Augstein / AP

Trudeau said Canada would also make a new commitment to appoint a ‘fentanyl czar’, list cartels as terrorists, ensure “24/7 eyes on the border”, and launch a joint strike force with the US to combat organised crime, fentanyl and money laundering.

“Proposed tariffs will be paused for at least 30 days while we work together,” he said.

Trump had earlier said he would pause the tariffs being imposed on Mexico for one month, after the country agreed to reinforce its northern border with 10,000 of its National Guard members to stem the flow of illegal drugs, particularly fentanyl.

Mexican President Claudia Sheinbaum said the agreement also includes a US commitment to act to prevent the trafficking of high-powered weapons to Mexico.

The two leaders spoke by phone on Monday, just hours before the tariffs were set to take effect.

Mexico and the US will use the month-long pause to engage in further negotiations, Trump said.

US stocks and other global financial markets slumped on the looming tariffs while world leaders responded to Trump’s threats to expand tariffs to the European Union (EU) as well.

Both Canada and Mexico had announced retaliatory tariffs of their own.

The tariffs on China remain poised to take effect on Tuesday. The White House said Trump is set to speak with Chinese President Xi Jinping in the coming days.

The US Customs and Border Protection said in a notice that mailed packages from China will undergo formal customs entry under the new tariffs.

Chinese imports that are eligible for temporary duty exemptions will also be subject to US tariffs of 10 per cent, the notice said.

A White House adviser had earlier said the administration had noticed that Mexico was “serious” about Trump’s executive order on tariffs but Canada had “misunderstood” it.

“The good news is that in our conversations over the weekend, one of the things we’ve noticed is that Mexicans are very, very serious about doing what President Trump said,” White House National Economic Council director Kevin Hassett said on CNBC.

“President Trump was absolutely 100 per cent clear that this is not a trade war, this is a drug war,” Hassett said.

When asked what Canada and Mexico must do to lift their tariffs, Trump told reporters on Sunday they “have to balance out their trade, number one”.

“They’ve got to stop people from pouring into our country … they have to stop people pouring in, and we have to stop fentanyl. And that includes China,” he said.

China called fentanyl America’s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.

Canada said it would take legal action under the relevant international bodies to challenge the tariffs.

Speaking in Washington DC on Sunday, Trump indicated that the 27-member EU would be next in the firing line but did not say when.

“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them,” he told reporters.

EU leaders meeting at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the US imposes tariffs but also called for reason and negotiation.

EU foreign policy chief Kaja Kallas said if the US and Europe started a trade war “then the one laughing on the side is China”.

Economists said the plan to impose 25 per cent tariffs on Canada and Mexico and 10 per cent tariffs on China would slow global growth and drive prices higher for people in the US.

Trump says they are needed to curb immigration and narcotics trafficking and spur domestic industries.