US President Donald Trump announced on Thursday a postponement of certain tariffs aimed at Canada and Mexico, prompting Ottawa to suspend a forthcoming series of countermeasures. This decision provides a temporary reprieve for businesses and consumers, particularly in light of the recent negative impact on financial markets. Following the implementation of tariffs of up to 25 percent on Tuesday, stock markets experienced a significant decline, with economists cautioning that such broad tariffs could hinder US economic growth and increase inflation. However, Trump signed orders on Thursday to delay the new tariffs on imports from Canada and Mexico that fall under a North American trade agreement, while he dismissed any connection between his actions and the market’s volatility. The suspension, which will remain in effect until April 2, is particularly beneficial for automakers, as components frequently cross North American borders multiple times during the manufacturing process. After discussions with the major US automakers—Stellantis, Ford, and General Motors—Washington initially declared a one-month exemption for vehicles under the United States-Mexico-Canada Agreement (USMCA).
US President Donald Trump announced on Thursday a postponement of certain tariffs aimed at Canada and Mexico, a decision that prompted Ottawa to suspend its planned countermeasures. This development comes as a relief to businesses and consumers following significant declines in stock markets after the implementation of tariffs of up to 25 percent earlier in the week. Economists had expressed concerns that such broad tariffs could negatively impact US economic growth and contribute to rising inflation. Despite the market backlash, Trump asserted that his decision to delay the tariffs, which will now take effect on April 2, was not influenced by the financial turmoil. This temporary reprieve is particularly beneficial for the automotive industry, where components frequently cross borders during the manufacturing process. Following discussions with major US automakers, including Stellantis, Ford, and General Motors, the administration initially granted a one-month exemption for vehicles under the United States-Mexico-Canada Agreement (USMCA). A White House representative indicated that approximately 62 percent of Canadian imports would still be subject to the new tariffs, primarily affecting energy products at a reduced rate of 10 percent, while around half of Mexican imports are processed through the USMCA.
Trump emphasized that these recent actions create a more favorable environment for American car manufacturers.On Thursday, Trump announced that additional tariffs would be implemented on April 2, stating that these tariffs would be “reciprocal in nature.” He had previously committed to imposing reciprocal duties to address practices that the United States considers to be unjust. At that time, goods from Canada and Mexico could still be subject to these tariffs. Furthermore, the US president indicated that he would not alter the extensive tariffs on steel and aluminum imports, which are scheduled to take effect in the coming week.
