President Trump announced on Thursday that he will be pausing the 25% tariffs on U.S. imports from Mexico and Canada that are covered under the United States-Mexico-Canada Agreement (USMCA). This decision comes after a call with Mexican President Claudia Sheinbaum, in which they agreed to exempt goods covered by the trade pact from tariffs. The exemption will remain in effect until April 2, 2023. This move is seen as an accommodation for Mexico and a sign of the good relationship between the two countries.
The USMCA covers the vast majority of imports from Mexico, including over $45 billion worth of agricultural products that the U.S. imports from Mexico. Canadian energy, which is not included in the USMCA, is expected to be tariffed at 10%, potentially raising gas prices and heating costs in the U.S. Despite the temporary exemption from tariffs, uncertainties around trade policies have already disrupted supply chains and caused confusion for businesses and consumers.
Economists warn that tariffs are likely to lead to price increases on goods ranging from vegetables to automobiles. The uncertainty around tariffs has led to concerns among business leaders about increased costs being passed on to consumers. President Trump’s decision to delay tariffs on Mexico and Canada highlights the complexity and challenges of trade relations between these countries.
