Trump pauses tariffs for some Canadian and Mexican goods
President Donald Trump on Thursday paused tariffs on some products from Mexico and Canada, temporarily withdrawing major portions of a policy issued two days earlier.
The one-month exemption will lift tariffs for all Canadian and Mexican goods compliant with United States-Mexico-Canada Agreement, or USMCA, a free trade agreement, White House officials told ABC News.
Roughly 50% of imports from Mexico comply with USMCA, and 38% of imports from Canada comply with USMCA. Motor vehicles and auto accessories make up a good portion of the of USMCA-compliant trade, the officials added.
Despite pausing tariffs on a large number of goods from Canada and Mexico, Trump said on Thursday afternoon he is still sticking with his plan to issue tariffs on foreign steel and aluminum products starting next week.
"We're not looking at that," he said at the White House when asked about a pause on those tariffs.
The easing of tariffs on some Mexican goods came after a conversation between Trump and Mexican President Claudia Sheinbaum, Trump said Thursday in a post on Truth Social.
"Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!" Trump said.
Minutes later, Sheinbaum reciprocated in similar fashion.
"We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results, within the framework of respect for our sovereignties," Sheinbaum said in a post on X.
Trump made the announcement soon after Commerce Secretary Howard Lutnick said Thursday morning that a one-month delay of tariffs on Mexico and Canada would likely apply to all products compliant with the USMCA.
Trump negotiated the USMCA during his first term, signing the agreement with Canada and Mexico in 2018.
"That which is part of President Trump's deal with Canada and Mexico [is] likely to get an exemption from these tariffs," Lutnick told CNBC on Thursday morning.
Despite the effort to ease some tariffs, stocks dropped on Thursday as fallout from the policy continued to roil markets.
The Dow Jones Industrial Average fell about 425 points, or 1%, while the S&P 500 fell 1.7%. The tech-heavy Nasdaq sank 2.6%.
The selloff erased some of the market gains delivered a day earlier after Trump gave U.S. automakers a one-month reprieve from the tariffs. Duties on a host of other goods remained in place, however.
The U.S. earlier this week slapped 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
The one-month delay in auto tariffs triggered a rally for shares of U.S. carmakers on Wednesday, but the largest companies in the sector turned down on Thursday.
Shares of Ford ticked down 0.4%, while General Motors fell 2.6%. Stellantis -- the parent company of Chrysler and Jeep -- saw its stock price fall 1%.
Tesla, the electric carmaker led by Elon Musk, tumbled 5.5% on Thursday.
The exemptions on automobiles from the president's tariffs were a one-time thing, Trump told reporters at the White House on Thursday.
Trump said he told the automakers, "'That's it.'"
The president added there would be some disruption resulting from the tariffs, but he brushed them off saying it would be "short-term" and adding that the tariffs have to be done.
"They'll always be a little short-term interruption. I don't think it's going to be big, but the countries and companies that have been ripping us aren't particularly happy with what I'm doing. But the United States will be very happy. And, you know, our farmers are going to be very happy," Trump said.
The tariffs were expected to pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.
The American Automotive Policy Council, or AAPC, a trade group that represents Ford, General Motors and Stellantis, praised the one-month tariff exemption.
"American Automakers Ford, GM and Stellantis applaud President Trump for recognizing that vehicles and parts that meet the high US and regional USMCA content requirements should be exempt from these tariffs," AAPC President Matt Blunt told ABC News in a statement.
Michelle Stoddart and Molly Nagle contributed to this report.
