US President Donald Trump sowed more tariff confusion on Thursday when he paused the 25% tariffs on all goods coming into the US from Canada and Mexico that he put into effect on Tuesday.
The latest pause lasts until 2 April and covers all goods covered under the US-Mexico-Canada free trade agreement (USMCA) that Trump negotiated in 2018.
His latest u-turn came after stock markets plummeted in response to Tuesday’s tariffs and Canadian Prime Minister Justin Trudeau’s defiant pledge on the same day to retaliate with reciprocal tariffs and non-tariff trade measures.
The Dow closed yesterday lower by 428 points, or 0.99%. The broader S&P 500 fell 1.78%, and the Nasdaq Composite slid 2.61%.
Trump first paused tariffs on cars yesterday after speaking to the biggest US automakers but later widened the pause to all goods covered by the USMCA.
Yesterday’s pause was Trump’s second after he paused tariffs on Canada and Mexico for a month on 4 February.
So far, Trump’s tariffs on steel and aluminium from all countries are still due to take effect on 12 March.
Canada responded to the pause by saying it would not proceed with US$87bn in retaliatory tariffs due in just over two weeks, but left in place US$21bn in tariffs imposed this week on items such as fruits and vegetables, appliances and liquor, The Wall Street Journal (WSJ) reports.
But Doug Ford, premier of Canada’s most populous province, Ontario, said a 25% export tax on electricity sold to New York, Michigan and Minnesota would still take effect Monday and would stay in place until Trump dropped all tariff threats against Canada.
“As I always say, you know, you touch a stove once, and you get burned, you don’t touch a stove again,” Ford said, WSJ reports.
“The only deal is, ‘Drop the tariffs unconditionally, sit down and let’s start moving on a new USMCA deal,’” he added.
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