The dizzying changes to the Trump administration’s tariff plans continued Thursday as President Donald Trump announced he would suspend the 25% tariffs on most imported goods from Canada and Mexican until April 2. It was just Tuesday that the tariffs were placed on virtually all Canadian and Mexican imports.
According to The New York Times, Trump said he is exempting products that are traded under the rules of the U.S.-Mexico-Canada Agreement, the deal he signed in his first term.
Early in the day, Trump announced the pause on Mexican import tariffs, saying on social media, “I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA Agreement,” referring to the trade deal he negotiated during his first term in office. “I did this as an accommodation and out of respect for Mexico’s President (Claudia) Sheinbaum.”
Then later in the day, it was announced that the tariffs on Canadian goods were also being paused until April 2.
As news services have explained, Canada and Mexico don’t actually pay for the tariffs. Instead, the federal government’s tariffs are collected from companies that are paying to import the products. In other words, the tariffs are taxes on imports.
On Wednesday, Trump paused tariffs on cars and trucks that are imported from Canada and Mexico. U.S. automakers had complained that because of the complex supply chain between the three countries, the 25% tariffs would severely damage the U.S. auto industry. The impact of the tariffs on the automakers is hard to predict with accuracy. Estimates on how much the tariffs will add to the cost of cars and trucks range from about $4,000 to $10,000, according to Forbes.
Trump’s on-again, off-again tariff strategy has sent shockwaves through the stock market and the industries that rely on products from Canada and Mexico, including U.S. homebuilders. For the week, the Dow Jones Industrial Average has dropped more than 1,400 points as investors become increasingly concerned about a slowing economy, higher inflation and the impact of Trump’s tariffs.
