President Trump chose to postpone the 25% duty on Mexican and Canadian goods for one month after announcing them a few days earlier. Both Mexico and Canada have pledged to increase border security, prompting this action. Consumers in the United States would not have seen price increases and these adjacent nations’ economy would have taken a hit if the tariffs had been implemented immediately.
Canada will spend $1.3 billion to fortify its borders, as announced Monday by Prime Minister Justin Trudeau on social media. On top of trying to stop the fentanyl from entering the nation, this would involve additional helicopters, tech, and people. The Canadian government first announced the investment towards the year’s conclusion. Trump confirmed the 30-day tariff halt shortly after, saying that the president will utilize that time to try to strike a final economic deal with Canada.
Meanwhile, in an effort to combat drug trafficking, especially fentanyl, Mexican President Claudia Sheinbaum has announced plans to send 10,000 National Guard personnel to strengthen Mexico’s northern border. Subsequently, Trump announced that the United States will maintain border security negotiations with Mexico, with Scott Bessent and Marco Rubio serving as the principal negotiators.
The next day, a 25% duty was to be imposed on practically all imports from Mexico and Canada, as per Trump’s earlier executive order. The United States’ two largest trading partners were on the brink of a trade war as a result of this decision, which may lead to price increases for necessities like fresh food, fuel, and automobiles. On top of that, he closed a loophole that let certain Chinese e-commerce firms evade taxes and imposed a 10% charge on all Chinese imports. In quick succession, China imposed duties of its own and declared its intention to contest the US action at the World Trade Organization.
Stocks fell after tariffs were announced, but then rose again following the agreement with Mexico. Many were worried that Trump’s tariff proposals would hurt the economy and drive up prices for everyone.