US President Donald Trump suspended the sweep fees recently imposed on Mexican imports after talks with Mexican President Claudia Sinbaum on Thursday, but tensions with Canada continued to simmer amid a strong blow to global markets.
Trump said the new tariffs on Mexico will not apply to trade that falls into an agreement between the US, Mexico and Canada for now, adding that “the agreement will be until April 2.”
On April 2nd, Canada and Mexican goods could still face mutual collection.
Trump said the truth about his deal: “I did this as a accommodation facility and I respected President Sinbaum. Our relationship is very good.”
His remarks were in contrast to comments after he accused him of using the conflict to “keep it up in power,” following his previous talk with Canadian Prime Minister Justin Trudeau.
Trudeau said Thursday that Ottawa will remain in a trade war with Washington for a “foreseeable future” even if there is a “resting in certain sectors.”
“Our goal is to get these tariffs and all the tariffs have been removed,” Trudeau added.
Trump’s 25% tariffs on US imports from Canada and Mexico came into effect Tuesday, and economists say Americans are likely to face widespread price increases.
The expanded reprieve for Mexico in the US came the day after the White House gave temporary relief to carmakers from all taxes, from wood to avocado imports.
Record deficit
Since taking office in January, Trump has posed a similar set of tariff threats for allies and enemies, but has declared that the trade war will become an important part of his foreign policy.
Trump, along with China, justified tariffs on two huge US neighbors and key trading partners as a way to stop illegal immigration and human trafficking of the deadly drug fentanyl.
However, Canada and the US government data show that Canada contributes less than 1% of fentanyl to its illegal supply. It is also a relatively minor source of illegal immigration compared to flows across the Mexican border.
Meanwhile, China has pushed back allegations of its role in the fentanyl supply chain to the US, calling it a domestic issue where tariffs are not resolved.
Trump said tariffs should be the main source of revenue for the US government, but said trade imbalances and practices will correct practices that Washington believes are unfair.
The US trade deficit surged to new records in January, according to government data on Thursday. While imports surged, tariff concerns flare up in the month of Trump’s inauguration.
The overall trade gap for the world’s largest economy went from 34% to $131.4 billion against the backdrop of a 10% jump in imports that month.
This was the widest deficit of a month on record, dating back to 1992, and the expansion was more than analysts had expected.
Customs Jitter
Analysts say it is likely that the US deficit has been strengthened by gold imports.
But “removing this impact means all other imports will rise by 5.5%, indicating that front-loading of cargo is in full swing,” says Matthew Martin, senior economist at Oxford Economics.
This refers to the tendency for businesses to preempt additional costs from potential tariffs and potential supply chain disruptions.
An economist at Pantheon Macroeconomics said of the surge in gold imports:
The US deficit was a key focus of Trump’s first administration, and at the time he was particularly battling a blow war with China.
Since taking office, Trump has launched a “mutual tariff” plan tailored to each US trade partner to tackle trade practices deemed unfair by Washington.
He also threatens tariffs on other imports, from semiconductors to cars.
(Except for the headline, this story has not been edited by NDTV staff and is published by Syndicate Feed.)
