On Thursday, President Donald Trump delayed 25% tariffs on Mexican and Canadian imports for a month, citing concerns about the economic impact of a trade war.

The Trump administration claims its tariffs are to deter fentanyl smuggling, but they have ripped a hole in the decades-old North American trade agreement. Trump’s tariff plans have also caused the stock market to sink and alarmed U.S. consumers, as the New York Post reported.

Trump has also suggested addressing the trade deficit to reduce tariffs, in addition to fentanyl. In the Oval Office, he reiterated his vow to impose “reciprocal” tariffs on April 2.

From Trump

“Most of the tariffs go on April the second,” Trump said before signing the orders. “Right now, we have some temporary ones and small ones, relatively small, although it’s a lot of money having to do with Mexico and Canada.”

Trump declared that he had no intention of extending the exemption from the 25% tariff on automobiles for an additional month.

According to the orders signed by Trump, imports from Mexico that adhere to the 2020 USMCA trade treaty would be exempt from the 25% tariffs for a month.

Auto imports from Canada that conform with the trade pact would dodge 25% taxes for a month, while U.S. farmers importing potash from Canada would pay 10% duties, the same rate Trump wants to penalize Canadian energy items.

Tariff Details

Due to their non-USMCA compliance, 62% of Canadian imports will likely face higher tariffs, according to a White House official.

The official added that half of Mexico's non-USCMA compliant imports would be subject to taxes under Trump's upcoming orders.

International Response

Mexico President Claudia Sheinbaum plans to announce retaliatory measures on Sunday, but this is in the face of Trump crediting her with making progress on illegal immigration and drug smuggling which exempted the country from the tariffs in February.

“I did this as an accommodation, and out of respect for, President Sheinbaum,” Trump said on Truth Social. “Our relationship has been a very good one, and we are working hard, together, on the Border.”

After Canada retaliated with $30 billion in Canadian (US$21 billion) taxes on U.S. exports, Trump soothed ties. The government halted its second wave of retaliatory duties on $125 billion in U.S. imports.

Tariff History

Trump's fluctuating tariffs have caused the financial market to respond in kind, and some believe that has decreased consumer confidence and uncertainty for businesses.

After Commerce Secretary Howard Lutnick previewed the monthlong pauses on Thursday, major U.S. stock indexes briefly recovered. Major drops from this week resumed within an hour. The S&P 500 index fell below pre-Trump levels.

When questioned about whether the stock market decline was due to his tariffs, Trump said, “A lot of them are globalist countries and companies that won’t be doing as well because we’re taking back things that have been taken from us many years ago.”