US President Donald Trump temporarily suspends tariffs on Canada, Mexico amid market rout

The suspension, effective until April 2, follows a similar exemption granted to the automobile sector a day earlier. Trump had approved a one-month waiver for vehicles transported under the United States-Mexico-Canada Agreement (USMCA) after discussions with major US automakers, including Stellantis, Ford, and General Motors, the report added.

Despite the temporary relief, a White House spokesperson confirmed that the tariffs would still impact a significant share of Canadian and Mexican exports. Around 62% of Canadian imports remain subject to new duties, with energy products facing a reduced rate of 10%. Meanwhile, nearly half of Mexican imports fall under USMCA provisions and are exempt from additional levies.

While economists warn that the tariffs could slow US economic growth and spike inflation, Trump dismissed claims that market fluctuations influenced his decision. Instead, he reinforced his commitment to trade protectionism and hinted at further measures.

“Those are happening next week, and the big one will be on April 2nd when reciprocal tariffs are introduced,” Trump said. “Canada is a high-tariff nation. Canada charges us 250% for our milk products and imposes tremendous tariffs on lumber. We don’t need their lumber. We don’t need cars from Canada. We don’t need energy from Canada. We don’t need anything from Canada... We can be self-sustaining. I’m going to be freeing that up very shortly.”

The president suggested that future executive actions would focus on expanding domestic resource utilization to reduce reliance on Canadian imports.

Mexico secures trade relief

In contrast to his stance on Canada, Trump acknowledged a more cooperative trade relationship with Mexico. Following discussions with Mexican President Claudia Sheinbaum, he announced that Mexico would not face tariffs on goods covered under the USMCA.

“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 posted on Truth Social. “I did this as an accommodation, and out of respect for President Sheinbaum. Our relationship has been very good, and we are working hard together on border security and stopping fentanyl trafficking.”

Canada vows to fight tariffs

Despite the temporary relief, Canadian Prime Minister Justin Trudeau vowed to continue challenging US trade measures.

“Our goal remains to get these tariffs, all tariffs, removed,” Trudeau said, emphasizing that Canada would persist in its dispute with Washington “for the foreseeable future.”

Meanwhile, data from both US and Canadian governments indicate that Canada accounts for less than 1% of illicit fentanyl in the US supply. China has also rejected US accusations regarding its role in fentanyl trafficking, arguing that tariffs will not resolve what it considers a domestic issue.