President Trump changes course, delays some tariffs on Mexico and Canada

(AP) President Donald Trump on Thursday postponed 25% tariffs on many imports from Mexico and some imports from Canada for a month amid widespread fears of the economic fallout from a broader trade war.

The White House insists its tariffs are about stopping the smuggling of fentanyl, but the taxes proposed by Trump have caused a gaping wound in the decades-old North American trade partnership, and Canada has felt compelled to quickly take aggressive countermeasures. Trump's tariff plans have also caused the stock market to sink and alarmed U.S. consumers.

In addition to his claims about fentanyl, Trump has insisted that the tariffs could be resolved by fixing the trade deficit and he emphasized while speaking in the Oval Office that he still plans to impose “reciprocal” tariffs starting on April 2.

“Most of the tariffs go on April the second,” Trump said before signing the orders. “Right now, we have some temporary ones and small ones, relatively small, although it’s a lot of money having to do with Mexico and Canada.”

Trump said he was not looking to extend the exemption on the 25% tariff for autos for another month.

Imports from Mexico that comply with the 2020 USMCA trade pact would be excluded from the 25% tariffs for a month, according to the orders signed by Trump. Auto-related imports from Canada that comply with the trade deal would also avoid the 25% tariffs for a month, while the potash that U.S. farmers import from Canada would be tariffed at 10%, the same rate at which Trump wants to tariff Canadian energy products.

Roughly 62% of imports from Canada would likely still face the new tariffs because they're not USMCA compliant, according to a White House official who insisted on anonymity to preview the orders on a call with reporters. Half of imports from Mexico that are not USCMA compliant would also be taxed under the orders being signed by Trump, the official said.

Mexico President Claudia Sheinbaum has planned to announce any retaliatory measures on Sunday, but Trump credited her with making progress on illegal immigration and drug smuggling as a reason for again pausing tariffs that were initially supposed to go into full 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.”

Trump’s on-again, off-again tariffs threats have roiled financial markets, lowered consumer confidence, and enveloped many businesses in an uncertain atmosphere that could delay hiring and investment.

Major U.S. stock markets briefly bounced off lows after Commerce Secretary Howard Lutnick previewed the month-long pauses on CNBC on Thursday. Significant declines already seen this week resumed within an hour. The S&P 500 stock index has fallen below where it was before Trump was elected.

Asked whether the 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.”

Trump also claimed that he's “not even looking at the market,” even though he has in the past asked about how the stock market is responding in front of the reporters covering him.