Trump Agrees to Pause Tariffs on Canada and Mexico in Exchange for Increased Border Enforcement

By Anastasios Gordon Sekandi – updated at 05:12 EAT Tuesday 04 February 2025

WASHINGTON | HICGI — Trump Pauses Tariff Threats on Canada and Mexico Amid Border Security Negotiations

President Donald Trump agreed Monday to a 30-day pause on his proposed tariffs against Mexico and Canada, as the U.S.’s two largest trading partners took steps to address his concerns over border security and drug trafficking.

The temporary reprieve comes after days of escalating tensions that brought North America to the brink of a trade war—one that could have slowed economic growth, driven up prices, and strained two of the United States’ most crucial alliances.

“I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for a 30-day period to see whether or not a final Economic deal with Canada can be structured,” Trump posted on social media. “FAIRNESS FOR ALL!”

Canadian Prime Minister Justin Trudeau acknowledged the pause in a post on X, stating that Canada would appoint a fentanyl czar, designate Mexican cartels as terrorist organizations, and launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl trafficking, and money laundering.

https://twitter.com/Trudeaus_Ego/status/1886530556029964698?t=sPk7JH5OhBNAvTrwwNOqnA&s=19

The decision mirrors a similar agreement with Mexico, allowing time for negotiations on illegal immigration and drug smuggling. Meanwhile, a separate 10% tariff on Chinese imports remains set to take effect Tuesday, though Trump signaled upcoming discussions with Chinese President Xi Jinping.

https://twitter.com/realDonaldTrump/status/1886456105372459141?t=zPDZsafKw-WMjz1XEyM-OQ&s=19

While markets and political leaders may find relief in the temporary halt, uncertainty remains. Trump has not ruled out reinstating tariffs on Canada and Mexico, and he has already signaled plans to target imports from the European Union.

On Saturday, Trump had announced 25% tariffs on imports from Mexico and Canada, along with an additional 10% tariff on Canadian oil, natural gas, and electricity—moves that rattled investors, businesses, and lawmakers.

Economic analyses from the Tax Foundation, the Tax Policy Center, and the Peterson Institute for International Economics warn that such tariffs could slow growth, reduce incomes, and drive up prices. However, Trump has defended his approach, arguing that tariffs are a necessary tool to curb illegal immigration, combat fentanyl smuggling, and demand what he sees as fair treatment for the United States.

As negotiations unfold, the global economy remains on edge, uncertain whether a full-blown crisis has been averted—or merely delayed.

President Donald Trump and Mexican President Claudia Sheinbaum announced a monthlong pause on planned tariff increases following what Trump described as a “very friendly conversation” on social media. He expressed optimism about upcoming negotiations, stating, “I look forward to participating in those negotiations with President Sheinbaum as we attempt to achieve a ‘deal’ between our two countries.”

The talks will be led by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, Secretary of Commerce nominee Howard Lutnick, and senior Mexican officials.

As part of the agreement, Sheinbaum pledged to deploy 10,000 National Guard troops to reinforce Mexico’s border security. In return, the U.S. government committed to curbing the trafficking of high-powered weapons into Mexico—a long-standing demand from Mexican leaders.

The pause provides both nations time to work toward a broader agreement on trade, security, and immigration while averting an immediate escalation of economic tensions.