The American president signed this Saturday, February 1, 2025, decrees imposing customs duties on several countries: Mexico, Canada and China. This Monday, February 3, 2025, the latter reverses his position regarding his southern neighbor in exchange for compensation.
US President Donald Trump suspended tariffs on Mexico on Monday, after a “friendly” exchange with his Mexican counterpart in which she promised to deploy 10,000 additional troops to the border. The two heads of state announced almost simultaneously that the United States had suspended the tariffs for one month, which were set to increase the price of imports from Mexico by 25% starting Tuesday.
Donald Trump and Mexican President Claude Sheinbaum reached a “deal” temporary after a conversation the US president described as “cordial” on his Truth Social platform. Mexico pledges to send 10,000 additional troops to US border“to stop the flow of fentanyl – a deadly opioid – and illegal immigrants” into the United States, Donald Trump reported. In exchange, the president is granting Mexico a form of grace period before implementing the promised tariffs.
Sostuvimos una buena conversación con el presidente Trump con mucho respeto a nuestra relación y la soberanía; llegamos a una serie de acuerdos:
1.México reforzará la frontera norte con 10 mil elementos de la Guardia Nacional de forma inmediata, para evitar el tráfico de drogas…
— Claudia Sheinbaum Pardo (@Claudiashein) February 3, 2025
Donald Trump is scheduled to speak later in the day with Canadian Prime Minister Justin Trudeau, whose country is also targeted by 25% tariffs. “I just spoke with Justin Trudeau. I'll talk to him again at 3:00 p.m.”(20:00 GMT), the head of state wrote earlier in the day on Truth Social, reaffirming that he had imposed customs duties on Canada and Mexico to stem the arrival of drugs and illegal immigrants in the United States. On Monday morning, White House economic adviser Kevin Hassett had affirmed that this was not a trade war but a “war on drugs”, in an interview with the television channel CNBC on Monday. He added that Mexico seemed to have better understood what Donald Trump expected, unlike Canada, that is to say to be “much much more incisive in the war against drugs”.
“Stupid”
The extension granted to Mexico has somewhat reassured the financial markets, while the scale of the promised customs duties, at the risk of penalizing all the economies involved in the trade war, had come as a surprise. Wall Street, which had opened sharply lower, erased some of its losses while remaining in the red. Around 15:55 GMT, the Dow Jones was down only 0.32%, the Nasdaq index lost 0.97% and the broader S & P 500 index, 0.69%.
Read also: After Donald Trump's announcements on customs duties, the European Union is worried and is meeting this Monday in Brussels
In early trading, the Dow Jones fell 1.25%, the Nasdaq index 2.14% and the broader S&P 500 index 1.65%. Mexico, Canada and China are the United States' main trading partners, accounting for more than 40% of the country's imports. The American president had announced 25% tariffs on all products from Mexico and Canada, with the exception of hydrocarbons from the northern neighbor, which are now taxed at 10%. Donald Trump has also targeted China by imposing 10% customs duties, which are in addition to those already existing on a number of Chinese products.
On Monday morning, the Canadian province of Ontario, the economic heart of the country, announced that it was banning American companies from public contracts, which will cause them “to lose tens of billions of dollars in new revenue”, according to its Premier Doug Ford. “They only have President Trump to blame,” he said. Doug Ford also canceled a provincial contract worth 100 million Canadian dollars (66 million euros) with Starlink, the company controlled by billionaire Elon Musk, a close ally of the American president. For the time being, the European Union (EU) has been spared, but it knows it is in Donald Tump's sights.
“If we were attacked on trade issues, Europe, as a power that stands its ground, will have to make itself respected and therefore react”, declared French President Emmanuel Macron, at the opening of a meeting in Brussels on Monday. “We must do everything possible to avoid these totally useless and stupid customs duties and trade wars,” said Polish Prime Minister Donald Tusk.