Trump hits pause on Canada, Mexico tariffs
US President Donald Trump has backed away from his tariff threats against Mexico and Canada for 30 days after the two US neighbours agreed to boost border security efforts.
Trump on Saturday had directed that 25 per cent tariffs on most imports from the two American partners – and 10 per cent on Canadian energy products – go into effect at midnight Tuesday (Wednesday AEDT).
In a statement on X late on Monday, Canadian Prime Minister Justin Trudeau said he had pledged additional co-operation on border security on a call with Trump. It followed similar moves by Mexico.
“Proposed tariffs will be paused for at least 30 days while we work together,” Trudeau said.
Trump said Canada had agreed to secure its border and work to combat the flow of fentanyl into the US. It will also implement a $US1.3 billion ($A2.1 billion) border plan and take further steps on border security.
Trudeau said the new plans included appointing a “fentanyl tsar”, listing cartels as terrorists, having “24/7 eyes” on the US border and launching a joint strike force with the US on on crime, fentanyl and money laundering.
Earlier Trump hit a one-month pause on the Mexican tariffs after after Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal drugs, particularly fentanyl.
Mexican President Claudia Sheinbaum said the agreement also included a US commitment to act to prevent trafficking of high-powered weapons to her country.
The two leaders spoke by phone on Monday.
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Mexico and the US would use the month-long pause for further negotiations, Trump said.
“We have this month to work and convince each other that this is the best way forward,” Sheinbaum said.
Earlier on Monday, a White House adviser said the Trump administration had noticed that Mexico was “serious” about the executive order on tariffs.
“The good news is that in our conversations over the weekend, one of the things we’ve noticed is that Mexicans are very, very serious about doing what President Trump said,” White House national economic council director Kevin Hassett said on CNBC.
“President Trump was absolutely 100 per cent clear that this is not a trade war, this is a drug war.”
The latest twist in the tariffs saga sent the Canadian dollar soaring after slumping to its lowest in more than two decades. The news also gave US stock index futures a lift after a day of losses on Wall Street.
In Washington DC on Sunday, Trump indicated that the 27-member European Union was next in the firing line but did not say when.
“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them,” he said.
At an informal summit in Brussels on Monday, EU leaders said Europe was prepared to fight back if the US imposed tariffs but also called for reason and negotiation.
EU foreign policy chief Kaja Kallas said if the US and Europe started a trade war “then the one laughing on the side is China”.
Economists said the plan to impose 25 per cent tariffs on Canada and Mexico and 10 per cent tariffs on China would slow global growth and drive prices higher for people in the US.
Trump said they were needed to curb immigration and narcotics trafficking and spur domestic industries.
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Trump’s tariffs would cover almost half of all US imports and would require the United States to more than double its own manufacturing output to cover the gap – an unfeasible task in the near term, ING analysts wrote.
Musk axes agency
Meanwhile, White House slasher Elon Musk said work was under way to shutter US foreign aid agency USAID.
On Tuesday (AEDT), Musk said USAid was “beyond repair”.
He said Trump agreed the agency, which has 10,000 staff, should close. Trump said USAID had “been run by a bunch of radical lunatics”, adding: “We’re getting them out, and then we’ll make a decision”.
A group of Democrat Senate and House representatives were blocked from entering the agency’s headquarters on Monday.
At an impromptu press conference outside the Washington DC offices, they protested against moves to shutter the agency.
“What Trump and Musk have done is not only wrong, it’s illegal,” Representative Don Beyer said.
“USAID was established by an act of Congress, and it can only be disbanded by an act of Congress.”
Musk was the focus of particular anger. Senator Chris Murphy described him as part of an “unelected billionaire class trying to take over our government”.
Trump has ordered a global freeze on most US foreign aid as part of his “America First” policy, which is already sending shockwaves around the world.
Musk has estimated the Trump administration could cut $US1 trillion from the US deficit next year. He asserted, for example, that “professional foreign fraud rings” were stealing vast sums by masquerading as or creating fake digital US citizens.
But he has offered no evidence to support his fraud claim or explain how he reached the figure of $US1 trillion.
Asked on Sunday if Musk was doing a good job, Trump said: “He’s a big cost-cutter. Sometimes we won’t agree with it and we’ll not go where he wants to go. But I think he’s doing a great job.”
– with AAP
