Trump suspends new tariffs on Mexico for one month amid border agreement

WASHINGTON: US President Donald Trump has suspended new tariffs on Mexico for a month after Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal drugs, particularly fentanyl, he said on Monday.

The agreement also includes a US commitment to take action to stop the smuggling of high-powered weapons into Mexico, Mexican President Claudia Sheinbaum said on X. The two leaders spoke by phone on Monday, hours before US tariffs on Mexico, China and Canada were set to take effect.

Trump said the two countries would use the one-month suspension to engage in further negotiations.

“I look forward to participating in these talks with President Sheinbaum, as we try to get a ‘deal’ between our two countries,” he wrote on Truth Social.

“We have this month to work and convince each other that this is the best way forward,” Sheinbaum said at a news conference.

U.S. stocks, which had fallen sharply on Monday morning on fears of a deepening trade war, pared their losses after the announcement. The benchmark S&P 500 was down 0.7 percent by 10:45 a.m. ET (1545 GMT), cutting the day’s losses in half.

The surprise announcement also eased some pressure on the Mexican peso.

Trump said Monday that he had spoken to Canadian Prime Minister Justin Trudeau and would do so again at 3 p.m. ET (2000 GMT). Tariffs on Canada and China are set to take effect Tuesday, and Canada has announced retaliatory tariffs.

A senior Canadian official told a New York Times reporter that Ottawa is not optimistic that a similar recovery is possible, the reporter said on X.

Speaking in Washington after returning from his Mar-a-Lago estate on Sunday, Trump hinted that the 27-nation European Union would be next in the firing line, but did not say when.

“They don’t take our cars; they don’t take our farm products. They take almost nothing, and we take everything from them,” he told reporters.

At an informal summit in Brussels on Monday, EU leaders said Europe would be ready to counter if the US imposes tariffs but also called for reason and dialogue.

Arriving at the talks, French President Emmanuel Macron said the EU would “have to respect itself and react accordingly” if its trade interests were attacked.

German Chancellor Olaf Scholz said the bloc could respond with its own tariffs against the US if necessary, but stressed it was better for both sides to find a deal on trade.

Trump hinted that Britain, which left the EU in 2020, could be spared the tariffs, saying: “I think it can be worked out.” “.

The United States is the European Union’s largest trading and investment partner. According to Eurostat data for 2023, the United States had a deficit of 155.8 billion euros ($161.6 billion) in goods trade with the EU, offset by a surplus of 104 billion euros in services.

The EU’s foreign policy chief, Kaja Kallis, said there were no winners in a trade war, and if a war breaks out between Europe and the United States, “then the laughing stock is China.”