Trump agrees to pause tariffs on Canada and Mexico but not on China

vesnaUSA News

A victory for all the armchair analysts. For each of you. Canadians have engaged in extensive discussions over the past months regarding the intentions of U.S. President Donald Trump towards Canada. Are his demands limited to minor border adjustments, or do they encompass more extensive economic reforms?

President Donald Trump has agreed to hold off imposing 25% tariffs on Canada and Mexico for 30 days, pulling the North American neighbours back from the brink of a potentially damaging trade war.

 

Courtesy CBC News

After last-minute calls with Trump, Canadian Prime Minister Justin Trudeau agreed to reinforce his country’s border with the US to clamp down on migration and the flow of the deadly drug fentanyl.

Earlier, Trump made a deal with Mexican President Claudia Sheinbaum. She agreed to reinforce the northern border with troops. In return the US would limit the flow of guns into Mexico.

But a US tariff of 10% on Chinese imports is still due to go into effect from 00:01 EST (05:00 GMT) on Tuesday.

Now, attention shifts to the next challenge. Trump has issued a warning that he may reinstate tariffs in 30 days unless a new economic agreement with Canada is reached, proclaiming “FAIRNESS FOR ALL” in a recent online post.

While it is premature to ascertain his ultimate objectives for the upcoming negotiations, he has indicated interests in dairy, auto parts, military expenditures, and now, banking regulations.

However, there is more to consider.

On Monday, Prime Minister Justin Trudeau announced that President Trump would refrain from imposing tariffs on Canada for at least 30 days.

Tariffs as a strategy for negotiation

Donald Trump

In conjunction, Trump issued a formal statement outlining a different aim for the next month. He will be monitoring developments at the Canadian border, and if progress is lacking, one can speculate on the nature of his next threats.

You guessed it: additional tariffs. This implies that when Trump once again threatens economic repercussions, the debate will resume regarding whether the focus is on border issues or other matters.

What is evident is that a volatile new factor has been introduced into the already charged political landscape in Canada, as the nation prepares for a new prime minister and potentially a general election, all while facing Trump’s threats.

He has proposed a 30-day suspension of tariffs, which brings us to early March. His administration is also hinting at tariffs in April, following the completion of studies on foreign trade practices.

They are citing three distinct justifications for tariffs: to rectify unfair trade practices, to generate revenue, and to engage in negotiations with other nations. It appears that the recent turmoil was primarily motivated by the third objective—negotiation.