WASHINGTON: President Donald Trump on Thursday postponed 25 per cent 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. Trump’s tariff plans have also caused the stock market to sink and alarmed US consumers.
In addition to his claims about fentanyl, Trump has insisted that the tariffs could be resolved by fixing the trade deficit and he emphasised 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 per cent tariff for autos for another month.
Imports from Mexico that comply with the 2020 USA-Mexico-Canada Agreement (USMCA) trade pact would be excluded from the 25 per cent 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 per cent tariffs for a month, while the potash that US farmers import from Canada would be tariffed at 10 per cent, the same rate at which Trump wants to tariff Canadian energy products.
Roughly 62 per cent 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.