US president Donald Trump has agreed to a 30 day pause in threatened US tariffs after Canada’s prime minister Justin Trudeau promised more cooperation on border security.
Speaking after a call with the US president, Mr Trudeau said Canada is implementing a $1.3 billion border plan to combat organised crime, fentanyl smuggling and money laundering.
“Proposed tariffs will be paused for at least 30 days while we work together,” he said.
Earlier, Mr Trump and his Mexican counterpart, Claudia Sheinbaum, announced a similar “pause” after Mexico agreed to deploy 10,000 members of its national guard to address drug trafficking at the border.
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The two leaders announced the move after what Mr Trump described as a “very friendly conversation”, and he said he looked forward to upcoming negotiations, which will be headed by secretary of state Marco Rubio, secretary of treasury Scott Bessent and secretary of commerce nominee Howard Lutnick, and high-level representatives from Mexico.
[ China counters with tariffs on US products after US levies take effectOpens in new window ]
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The details of the agreements came on a day of extreme volatility in global financial markets as investors reacted to the prospect of a dramatically escalating dispute involving some of the world’s largest economies.
The US president had announced tariffs over the weekend that included 25 per cent on Mexican and Canadian goods, plus 10 per cent on China.
Over the weekend, Canada announced retaliatory levies of 25 per cent on US goods, due to come in today, the same day as the US tariffs.
Mr Trump had also accused Ms Sheinbaum’s administration of engaging in an “intolerable alliance” with Mexican crime groups. Ms Sheinbaum rejected that “slanderous” accusation, but struck a softer note yesterday as she announced “a series of agreements” with Mr Trump.
Mexico had agreed to send 10,000 members of its national guard “to prevent drug trafficking from Mexico to the US, in particular of fentanyl”, she said. In return, the US had agreed to work to prevent high-powered weapons crossing the border into Mexico.
The tariffs – which had been scheduled to come into force today – would be paused for one month as a result, Ms Sheinbaum added.
[ Donald Trump pauses tariffs on Mexico for a month after agreement on borderOpens in new window ]
China vowed to file a case against the US at the World Trade Organisation and to take “corresponding countermeasures to firmly safeguard its rights and interests”.
Mr Trump signalled on Sunday that Europe could be his next target, telling the BBC that tariffs “will definitely happen with the European Union” and could come “pretty soon”.
European leaders have warned that a trade war with the US would destabilise economies on both sides of the Atlantic. The European Commission has prepared contingency plans to retaliate in kind if necessary.
Irish Government sources have expressed concern about the potentially destabilising effects on global trade, consumer confidence, markets, the world economy and policymaking arising from Mr Trump’s interventions – with instability in the west likely to bolster the position of Russia and China. Ireland would be particularly exposed in any EU-US trade dispute, as it exports billions of euro worth of goods to the US, predominantly from the pharmaceutical sector.
Speaking in Brussels yesterday , Taoiseach Micheál Martin said the EU needed to “act as one” if Mr Trump followed through on his threats to impose tariffs.
“First of all we have to see what happens, and assess it, measure it, calibrate the impacts and then develop our response,” the Fianna Fáil leader said. “I wouldn’t do anything prematurely right now, until we see what exactly is being proposed, if something is being proposed.
“The European Union has to act as one. We are an economic entity, we have a single market,” Mr Martin said. “In our view, protectionism more generally will harm citizens no matter where they reside, and that tariffs are a negative in respect of economic development.” – Additional reporting: Guardian
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