Washington (AFP) – US President Donald Trump said Thursday that he was pausing sweeping tariffs recently imposed on Mexican imports after talks with Mexican President Claudia Sheinbaum, while tensions with Canada continued to simmer amid strong blowback on world markets. Trump stated that fresh tariffs targeting Mexico would not apply to trade falling under a pact between the United States, Mexico, and Canada for now, adding: “This Agreement is until April 2nd.” On April 2, Canadian and Mexican goods could still face reciprocal levies.
Trump conveyed his intentions on Truth Social, stating: “I did this as an accommodation, and out of respect for, President Sheinbaum. Our relationship has been a very good one.” His remarks stood in sharp contrast to comments following earlier talks with Canadian Prime Minister Justin Trudeau, whom he accused of using the dispute to “stay in power.” Trudeau responded that Ottawa would remain in a trade war with Washington for “the foreseeable future,” even if there are “breaks for certain sectors.” “Our goal remains to get these tariffs, all tariffs removed,” Trudeau added.
Global markets tumbled after Trump’s 25 percent tariffs on US imports from Canada and Mexico took effect Tuesday, and economists predict Americans are likely to face broad-based price rises. The United States’ expanded reprieve for Mexico came a day after the White House provided automakers temporary relief from the levies that impacted everything from lumber to avocado imports.
Since taking office in January, Trump has made a series of tariff threats against allies and adversaries alike, declaring trade wars will be a key part of his foreign policy. He justified the tariffs on the United States’ two significant neighbors and vital trade partners, along with China, as a measure to stop illegal immigration and trafficking of the deadly drug fentanyl. However, Canada contributes less than one percent of fentanyl to the United States’ illicit supply, according to Canadian and US government data, and is also a relatively minor source of illegal immigration compared to flows across the Mexican border. China, meanwhile, has pushed back on US allegations of its role in the fentanyl supply chain, asserting that this is a domestic issue that tariffs will not resolve.
Trump has claimed that tariffs should become a major source of US government revenue while remedying trade imbalances and practices Washington deems unfair. The US trade deficit surged to a new record in January, according to government data released Thursday, as imports increased amid tariff concerns during the month of Trump’s inauguration. The overall trade gap of the world’s biggest economy ballooned 34 percent to $131.4 billion, accompanied by a 10 percent jump in imports for the month, according to the Commerce Department. This marked the widest deficit for a month on record, dating back to 1992, and the expansion was greater than analysts had anticipated.
Analysts suggest that the US deficit was likely bolstered by gold imports. However, “stripping out this impact, all other imports rose 5.5 percent, indicating front-loading of shipments was in full swing,” noted Oxford Economics senior economist Matthew Martin. This refers to a tendency for businesses to try and get ahead of additional costs from potential tariffs and possible supply chain disruptions. Economists at Pantheon Macroeconomics remarked on the surge in gold imports: “Tariff threats are reportedly prompting a mass repatriation of gold holdings to the US from elsewhere, mostly via Switzerland.”
US deficits were a key focus of Trump’s first administration, during which he waged a contentious tariffs war with China in particular. Since returning to office, Trump has launched plans for “reciprocal tariffs” tailored to each US trading partner to address trade practices that Washington deems unfair. He has also threatened tariffs on other imports ranging from semiconductors to autos.
© 2024 AFP
