Updated story with addition of Canada tariff pause
Even as new US tariffs on Canada, Mexico and China were officially about to take effect, President Trump on Monday said he and the president of Mexico have agreed to a one-month pause on anticipated 25% tariffs. Canada Prime Minister Trudeau and President Trump later announced a similar 30 day pause as well.
Mexico President Claudia Sheinbaum agreed in a phone call, Trump said, to immediately supply 10,000 Mexican soldiers to the border of the US and Mexico to work to stop illegal flows of fentanyl and immigrants into the US. He posted the update on Truth Social.
President Trump also said he had talked to Canada Prime Minister Justin Trudeau on Monday morning about the Canadian tariffs of 25% on many goods (10% on energy goods) and then planned to talk to him again later Monday. Trump later confirmed the 30-day pause in a Truth Social post.
In a tweet on X, Trudeau reported after the call that Canada is making new commitments to appoint a fentanyl czar, in addition to the pause on proposed tariffs. Canada will list cartels as terrorists, ensure 24/7 eyes on the border, launch a joint task force with the US to combat organized crime, fentanyl and money laundering backed by $200 million. Canada has already begun to implement a $1.3 billion border plan with new choppers and technology with 10,000 personnel, he reported.
Over the weekend, Trudeau had announced counter-tariffs on US goods coming to Canada. China said it was considering a legal remedy to new 10% tariffs on goods sent to the US.
After the tariffs were announced, there was a quick decline in stock markets which quickly improved after the one month pause was announced. Ford, General Motors and Constellation Brands, an importer of spirits from Mexico, had early morning losses, which were slowly showing improvement by afternoon.
Investment analysts theorized that Trump tariffs were meant as his form of opening negotiations on matters like border control. “Trump likes to make ‘deals,’” wrote Theirry Wizman, rates strategist at Macquarie. “Political and market pressure will also weigh on the parties to make concessions…”
Could President Trump’s intent with tariffs have been to provoke negotiations all along?
Rather than creating the setting for negotiations, analyst Jack Gold of J. Gold Associates said what Trump has done is “more like brinkmanship…Can he bully others into getting his way? Perhaps? But longer term it’s important to build trust…My guess he could have gotten the same results with less public bravado and more personal negotiations.”
Patrick Moorhead, lead analyst at Moor Insights & Strategy, said he had predicted Trump would use tariffs as a "starting point for negotiations for what he thinks is good for US interests." He further predicted some ongoing tariffs will continue "but not to the degree that he threatens first."
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