U.S. President Donald Trump announced on Thursday the suspension of the 25% tariffs he had imposed earlier this week on most imports from Canada and Mexico.
The move marks the latest shift in an unpredictable trade policy that has unsettled markets and raised concerns about inflation and economic growth.
The exemptions for the two largest U.S. trading partners are set to expire on April 2. At that point, Trump has threatened to enforce a global system of reciprocal tariffs on all U.S. trading partners unless progress is made on key trade and security concerns.
Initially, Trump had only mentioned an exemption for Mexico, but later in the day, he signed an amendment extending the exemption to Canada.
The three nations remain partners under the U.S.-Mexico-Canada Agreement (USMCA).
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In response to the temporary relief, Canada announced it would delay a planned second round of retaliatory tariffs on C$125 billion ($87.4 billion) worth of U.S. goods until April 2, according to a statement by Finance Minister Dominic LeBlanc on social media platform X.
The amended White House order also excludes duties on potash, a vital fertilizer for U.S. agriculture, but does not fully exempt energy products. A separate 10% tariff remains in place on Canadian energy exports, as the White House clarified that not all energy imports fall under the USMCA.
Trump imposed the tariffs after declaring a national emergency on January 20, his first day back in office, citing the fentanyl crisis as a major national security threat.
He claimed that the synthetic opioid and its precursor chemicals were flowing into the U.S. from China via Canada and Mexico.
As part of his broader trade crackdown, Trump also imposed a 20% tariff on all Chinese imports. China responded forcefully, vowing retaliation and urging the U.S. to address domestic drug abuse rather than blaming foreign nations.
“No country can imagine that it can suppress China on one hand while developing good relations on the other,” Chinese Foreign Minister Wang Yi stated at a briefing in Beijing on Friday.
Trump had originally announced the tariffs in early February but delayed their implementation for Canada and Mexico until Tuesday.
This week, he refused another delay and instead doubled a 10% levy on Chinese imports first introduced on February 4.
Future Tariffs and Economic Impact
Commerce Secretary Howard Lutnick confirmed that the U.S. will move forward with reciprocal tariffs on April 2 unless Canada and Mexico demonstrate significant action on the fentanyl issue.
“If they haven’t, this will stay on,” Lutnick told CNBC.
Despite the temporary exemptions for Canada and Mexico, Trump reaffirmed that the 25% tariffs on steel and aluminum imports will take effect as planned on March 12. Both nations are among the top suppliers of these metals to the U.S., with Canada being the primary source of aluminum imports.
On Wednesday, Trump also announced exemptions for automotive goods from the 25% tariffs after meeting with executives from major U.S. automakers, including Ford, General Motors, and Stellantis. Economists had warned that auto tariffs could drive up consumer prices and slow economic growth across North America.
