All customs duties were due to come into force Tuesday at midnight on Tuesday, but the two countries threatened to take retaliation measures, with the prospect of a wider regional trade war. Customs duties of 10 % imposed by Mr. Trump on China must still come into force.
President Donald Trump agreed to suspend for 30 days the taxation of customs duties in Mexico and Canadaafter the two countries agreed to take action to strengthen security at their borders and fight drug trafficking.
These breaks constitute a period of lull after a few tumultuous days which put North America on the verge of a trade war that could have crushed economic growth, cause prices outbreak and put an end to two of the most important partnerships of the United States.
“The proposed customs duties will be suspended for at least 30 days, the time we worked together,” Canadian Prime Minister Justin Trudeau said on Monday afternoon, adding that his government would name a “fentanyl tsar” Mexican cartels on the list of terrorist groups and would launch a “joint intervention force Canada-United States to combat organized crime, fentanyl and money laundering”.
The White House confirmed the break granted to the United States, which follows a similar measure taken with Mexico, allowing a period of negotiations on drug smuggling and illegal immigration.
Trump imposed customs duties of 25 % on imports on Mexico and 10 % customs duties on oil, natural gas, natural gas and electricity. He also decreed an additional 10 % tax on imports from China.
Customs duties of 10 % imposed on China must still come into force, although Mr. Trump has planned to meet with Chinese President Xi Jinping in the coming days.
The signing by Mr. Trump of pricing decrees for the three countries aroused the concern of investors, legislators, businesses and consumers. Taxes on imports, if maintained, could increase prices and undermine growth, even if Mr. Trump hinted that they were necessary to encourage other countries to end illegal immigration, to prevent The smuggling of fentanyl and to treat the United States, according to him, with respect.
But Mr. Trump and Mexican President Claudia Sheinbaum announced a month’s break on the increase in customs duties against each other after Mr. Trump described on social media as a “very conversation friendly “, and he said that he was looking forward to the next talks.
“I can’t wait to participate in these negotiations, with President Sheinbaum, while we try to reach an” agreement “between our two countries,” said the president on social media.
Trump said the negotiations would be directed by US Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, the candidate for the post of trade secretary Howard Litnick and high -level representatives of Mexico.
Ms. Sheinbaum said that she was strengthening the border with 10,000 members of the National Guard of her country and that the United States government would commit to “working to end the traffic of high power arms to Mexico”.
In 2019, when the Mexican government also avoided the customs tariffs of the Trump administration, the government announced that it would send 15,000 soldiers to its northern border.
However, the prospects were different for Canada for much of the day on Monday, but an agreement was later concluded in the day.
A senior Canadian civil servant said Canada was not sure of being able to avoid imminent customs prices as did Mexico because Canada has the impression that Trump administration is changing its requests for Canada More than she did for Mexico.
Asked on Monday afternoon on what Canada could offer as part of the negotiations to avoid customs duties, Trump told journalists gathered in the oval office: “I don’t know”.
ADVERTISEMENTThe American president also indicated that other import taxes could be imposed on China: “If we do not manage to conclude an agreement with China, customs duties will be very, very important”.
The White House spokesman Karoline Leavitt told journalists that Trump would speak with Chinese President Xi Jinping in the next two days and that Washington would provide a discussion report.
In recent weeks, Trump has continued to oppose Canada. He used a message published on Monday on social media to complain again of the lack of cooperation of Canada, despite decades of friendship and partnerships that go back to the Second World War and the response to terrorist attacks of September 11.
“Canada does not even allow American banks to open or do business in its territory,” Trump posted. “What does that mean? A lot of this kind, but it is also a drug war, and hundreds of thousands of people died in the United States because of the drugs that pour Through the borders of Mexico and Canada. “
ADVERTISEMENTHe also continued to mention the possibility that Canada becomes the 51ᵉ condition of the United States.
Market drop following Trump customs tariffs
The threat of a trade war between the United States and its two main business partners plunged Wall Street into chaos on Monday.
But after a brutal fall at first, American actions reduced their losses after Mexico said it had negotiated a month -long stay on customs duties.
The S&P 500 ended up losing 0.8 % after Asian and European indices recorded larger declines. The Dow Jones Industrial AVERrage index lost 122 points, or 0.3 %, and the NASDAQ Composite index dropped by 1.2 %.
ADVERTISEMENTSome of the heaviest losses have affected large technological companies and other companies that may be the most affected by the increase in interest rates that could result from American customs duties.
The fear that hovers on Wall Street is that it could increase the prices of food products, electronics and all kinds of other invoices for American households, adding upward pressure on an American inflation rate that Has widely slowed down since his peak of three was there.
The persistence or acceleration of inflation could prevent the federal reserve from reducing its interest rates, as it began to do in September, in order to give a boost to the American economy. The profits of American companies, on the other hand, may undergo downward pressure due to the slowdown in world trade.
A large part of Wall Street hoped that the customs tariffs mentioned by Mr. Trump during the presidential campaign were only words and an opening point for negotiations with the trade partners of the United States, rather than permanent policy. Monday’s flip-flops on Mexico and Canada ask whether Trump uses customs duties as a simple negotiation tool.
ADVERTISEMENTThe risk exists that customs duties still enter into force, leaving the global economy in uncertainty as to whether a crisis has been avoided or if a possible disaster could still occur in the coming weeks.
Even if the ordinances focus on illegal drugs, Mr. Trump’s remarks often focused on his feeling that foreign countries scam the United States by showing trade surpluses.
Trump said on Sunday, customs duties would soon be imposed on European Union countries. He mentioned customs duties as a diplomatic tool on national security issues, a way to increase revenue and a way to renegotiate existing commercial pacts.
Many economists outside the administration have warned that customs duties would increase prices and hinder growth. Trump himself said there would be some short-term pain after campaigning last year by promising that he could master inflation.
ADVERTISEMENT
