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President Donald Trump said Thursday that he had postponed a 25% tariff on most goods from Mexico for a month after a conversation with the country’s president.
Trump’s announcement said his commerce secretary Howard Lutnick was likely to “probably” delay tariffs in both Canada and Mexico. This was announced as a postponement for the second month since the import tax was first removed in early February.
“We’re working hard together at the border in stopping illegal aliens from entering the US and also stopping fentanyl from stopping them,” Trump said in The Truth Society.
In an interview with CNBC, Lutnick said that a one-month delay in import taxes “is likely to cover all USMCA-compliant goods and services,” referring to the trade deal Trump negotiated in his previous period, which replaced NAFTA. Lutnick estimated that more than half of what the US imports from both of these countries are eligible for exemptions.
President Donald Trump signed the memorandum on Thursday, seeking to impose “fair and mutual” trade tariffs on all major US trading partners, including longtime allies.
Lutnick’s comments come as Trump’s repeated tariff threats shook financial markets, engulfed many businesses in an uncertain atmosphere that could potentially slow down employment and investment. Lutnick emphasized that mutual tariffs, which are applying import taxes to countries where the US exports, will still be in place on April 2.
The US market bouncing off their lows for the day right after Rutnic spoke.
Also on Thursday, Canadian Prime Minister Justin Trudeau said he hopes his country will take part in the trade war with the United States in the near future.
Trudeau said the broader one-month suspension “aligns with some of the conversations we’ve had with the administrators.”
Canadian leaders said the move by the Trump administration was a “promising sign,” but that “means our response exist because tariffs exist.”
Lutnick also said in an interview that if both countries do not make enough progress to limit fentanyl shipping to the US, they could reapply the 25% tariff in a month.
“Hopefully we’ll announce this. USMCA compliant products will not have any tariffs the following month until April 2nd,” Lutnick said. “Hopefully Mexico and Canada will do a good job with fentanyl and this part of the conversation will go off the table. But if they don’t have this, this will continue.”
Lutnick added that Trump is expected to talk to Mexican President Claudia Sheinbaum later on Thursday, and that he could make an announcement afterwards.
Mexico and Canada “did have done a good job of providing us with more work” to show that Trump is moving to combat freight primarily of fentanyl in demand, in order to permanently remove the 25% obligation.
However, Lutonic suggested that the number of deaths from fentanyl overdose in the US will be an important indicator that the administration will focus on when determining whether Canada and Mexico have done well.
“We need to see fentanyl deaths decrease, and that’s the indicator I’m focusing on,” he said.
Customs duties or duties are taxes on products purchased from overseas and are used in virtually all countries.
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