U.S. pauses tariffs on Canada, Mexico until April 2

U.S. President Donald Trump said on social media Thursday that tariffs on Mexico and Canada will be paused until April 2, applying to anything covered under the United States-Mexico-Canada Agreement (USMCA), reported Xinhua.

"After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement. This Agreement is until April 2nd," Trump said in a post on "Truth Social."

"I did this as an accommodation, and out of respect for, President Sheinbaum," Trump said, noting that "our relationship has been a very good one."

Earlier that day, U.S. Commerce Secretary Howard Lutnick told CNBC that more one-month tariff exemptions under USMCA are "likely."

"It's likely that it will cover all USMCA compliant goods and services, so that which is part of President Trump's deal with Canada and Mexico are likely to get an exemption from these tariffs," Lutnick said.

Trump's latest announcement on Mexico tariffs came one day after White House Press Secretary Karoline Leavitt said that the president is granting a one-month exemption to three major automakers from the newly imposed 25 percent tariffs on Mexico and Canada.

The United States-Mexico-Canada Agreement (USMCA) is a trade agreement negotiated, signed, and ultimately enacted during Trump's first term, aimed at replacing the former North American Free Trade Agreement (NAFTA).

On Feb. 1, Trump signed an executive order imposing a 25 percent tariff on products imported from Mexico and Canada, with a 10 percent tariff increase on Canadian energy products. On Feb. 3, Trump announced a 30-day delay in implementing the tariffs on both countries and continued negotiations. According to this decision, the relevant tariff measures took effect on March 4.

Canada has announced retaliatory measures, while Mexico has signaled its intent to implement tariffs and other economic countermeasures. Businesses are increasingly concerned about the rising costs due to these tariffs, which could drive up consumer prices and contribute to an economic slowdown.

The stock market has shown significant volatility in response to the new tariffs, with investor uncertainty mounting as fears of potential economic repercussions grow.

The escalating tensions and economic uncertainties might have prompted Trump to reassess his trade policies.

Trump has yet to make announcement on an overall pause on Canada tariffs. In a post on Truth Social Thursday, he accused Canadian Prime Minister Justin Trudeau of using the tariff problem to further his re-election bid.

Trudeau, meanwhile, said on Thursday that Canada will continue to be in a trade war with the United States for the foreseeable future.

Meanwhile, Canadian Finance Minister Dominic LeBlanc announced on Thursday that Canada will halt the second wave of tariffs on U.S. goods until April 2.

"The United States has agreed to suspend tariffs on CUSMA (Canada-U.S.-Mexico Agreement)-compliant exports from Canada until April 2nd," LeBlanc said in his social media account shortly after U.S. President Donald Trump announced the tariff delay.

"As a result, Canada will not proceed with the second wave of tariffs on 125 billion Canadian dollars of U.S. products until April 2, while we continue to work for the removal of all tariffs."

Industry Minister Francois-Philippe Champagne said Canada's retaliatory measures remain, even after Trump's latest move to delay tariffs on some Canadian and Mexican goods until April 2.

According to local media, more than half of Canadian imports aren't covered and would likely still face the new tariffs because they're not USMCA compliant.

"As long as the threat remains, the pressure stays on," Champagne was quoted as saying in CTV News. "The Prime Minister has been clear on that. The only way you make that work is to keep the pressure."

On Thursday, Trump signed an executive order to delay tariffs on goods covered under the CUSMA.