Mexico to be exempt from tariffs for another month, U.S. now says
Exemptions through April 2 apply to Mexican goods subject to 2018's USMCA tripartite agreement
U.S. President Donald Trump on Thursday said Mexico won't be required to pay tariffs on any goods that fall under the United States-Mexico-Canada Agreement (USMCA, known in Canada as CUSMA) on trade until April 2, but made no mention of a reprieve for Canada despite his commerce secretary earlier saying a comparable exemption was likely.
"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 wrote on Truth Social. "This agreement is until April 2nd."
Sheinbaum thanked Trump for an "excellent and respectful" call on Thursday, and promised Mexico would continue working on security and migration as Washington temporarily eases tariffs on some Mexican imports.
"We will continue working together, particularly on issues of migration and security, which include reducing the illegal crossing of fentanyl into the United States, as well as weapons into Mexico," she said in a social media post. Mexico has said that at least 70 per cent of firearms used for criminal activity originate from the U.S.
Fentanyl flow again cited
Earlier on Thursday, U.S. Commerce Secretary Howard Lutnick said the one-month reprieve on hefty tariffs on goods imported from Mexico and Canada that has been granted to automotive products is likely to be extended to all products that comply with the U.S.-Mexico-Canada Agreement on trade.
Lutnick told CNBC he expected Trump to announce that extension on Thursday, a day after exempting automotive goods from the 25 per cent tariffs he slapped on imports from Canada and Mexico earlier in the week.
Trump "is going to decide this today," Lutnick said, adding "it's likely that it will cover all USMCA-compliant goods and services."
"So if you think about it this way, if you lived under Donald Trump's U.S.-Mexico-Canada Agreement, you will get a reprieve from these tariffs now. If you chose to go outside of that, you did so at your own risk, and today is when that reckoning comes," he said.
Nonetheless, Trump's social media post made no mention of a reprieve for Canada, the other party to the USMCA deal that Trump negotiated during his first term as president.
Lutnick said his "off the cuff" estimate was that more than 50 per cent of the goods imported from the two U.S. neighbours — also its largest two trading partners — were compliant with the USMCA deal that Trump negotiated during his first term as president.
Canadian Prime Minister Justin Trudeau called Lutnick's comments "promising" in remarks to reporters in Canada.
"That aligns with some of the conversations that we have been having with administration officials, but I'm going to wait for an official agreement to talk about Canadian response and look at the details of it," Trudeau said. "But it is a promising sign. But I will highlight that it means that the tariffs remain in place, and therefore our response will remain in place."
Lutnick emphasized that the reprieve would only last until April 2, when he said the administration plans to move ahead with reciprocal tariffs under which the U.S. will impose levies that match those imposed by trading partners.
In the meantime, he said, the current hiatus is about getting fentanyl deaths down, which is the initial justification Trump used for the tariffs on Mexico and Canada and levies on Chinese goods that have now risen to 20 per cent.
When pressed how the administration would measure progress, Lutnick replied to CNBC, "I think autopsy, death — as horrible as that is — should be the statistic."
Trudeau and other Canadian officials have pointed to U.S. government border seizure data, which does not show great quantities of the drug being shipped south.
While the U.S. has endured a horrific toll from drug toxicity deaths in recent years, Health Canada has tracked 49,105 "apparent opioid toxicity deaths" of Canadians from the start of 2016 to June 2024, indicating that the suffering is not one-way.
Trudeau not optimistic on end of trade disputes
Trudeau said he is expecting the U.S. and Canada to remain in a trade war.
"I can confirm that we will continue to be in a trade war that was launched by the United States for the foreseeable future," he told reporters in Ottawa.
While the flow of fentanyl has been given as a justification for the tariffs, Trump has also offered a variety of complaints about what he views as unfair trade practices. The U.S. president has complained about American trade deficits, even though many economists stress it is a poor indicator, on its own, of a country's economic health.
"I look at some of these agreements, I'd read them at night, and I'd say, 'Who would ever sign a thing like this?'" Trump said late last month.
Upon signing the USMCA in 2018, Trump characterized it as the "largest, fairest, most balanced, and modern trade agreement ever achieved."
With files from CBC News