U.S. President Donald Trump has again postponed for one month his announced 25 percent tariffs on many imports from Mexico and some from Canada, as fears grow over the potential economic damages of a widespread trade war.
Despite the temporary exemptions for the two U.S. neighbors, Trump is still planning to press ahead with a global regime of reciprocal tariffs on all trading partners of the United States on April 2.
“Most of the tariffs go on April the second,” Trump said.
“These exemptions don’t do much to resolve the general air of uncertainty,” Yung-Yu Ma, chief investment officer at BMO Wealth Management, was quoted by AP as saying.
“Businesses will still be cautious in the current environment until a lot more of the tariff picture is clear."
The White House says its tariffs against Mexico and Canada -- the two largest U.S. trading partners -- are intended to force the countries to take stronger measures against illegal border crossing and the smuggling of drug, including deadly fentanyl.
The plans for U.S. tariffs have many countries looking to impose retaliatory duties on American products and have roiled global stock markets amid fears of a trade war, economic slowdown, and rising consumer prices.
Asked whether the recent stock market decline was due to his tariffs, Trump said: “A lot of them are globalist countries and companies that won’t be doing as well because we’re taking back things that have been taken from us many years ago.”
Mexican President Claudia Sheinbaum had planned to announce retaliatory measures ahead of the temporary reprieve.
Trump earlier had hailed her for making progress on illegal immigration and drug smuggling as a reason for previously pausing tariffs that were initially set to go into effect in February.
“I did this as an accommodation, and out of respect for, President Sheinbaum," Trump said on Truth Social. "Our relationship has been a very good one, and we are working hard, together, on the border.”
Sheinbaum said she and Trump “had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results.”
Mexico has cracked down on cartels, sent troops to the U.S. border, and handed over to the Trump administration at least 29 top cartel bosses long sought by U.S. authorities.
She said the two countries will continue to work together on migration and security, and to cut back on fentanyl trafficking to the U.S.
Meanwhile, AP quoted two senior Canadian government officials as saying that country’s initial retaliatory tariffs will remain in place despite Trump’s postponement announcement.
Ontario Premier Doug Ford, the leader of Canada’s most populous province, also said that, starting next week, the province will charge 25 percent more for electricity shipped to some 1.5 million Americans in response to Trump’s tariff plan. The province supplies electricity to the U.S. states of Minnesota, New York, and Michigan.
Ford said Ontario’s tariff would remain in place despite the one-month delay by Trump, arguing that as long as the threat of tariffs remains, Ontario’s position wouldn’t change.
Prime Minister Justin Trudeau, who will step down as the Canadian leader on March 9, said he does not expect the trade war that Trump has launched to ease any time soon.
"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 on March 6.