Donald Trump Suspends Mexico & Canada Tariffs After Border Deals

Ever since US President Donald Trump took over from Joe Biden, a lot of changes have been made.

Apart from his ambitious AI project, Stargate, Trump has decided to impose tariffs on Canada, Mexico, and China.

However, on Tuesday (4 February 2025), he agreed to delay imposing 25% tariffs on Canada and Mexico for 30 days, pulling the North American neighbours back from the brink of a potentially damaging trade war.

Why did Trump make this call?

What Are Tariffs?

Before diving into the details, let’s take a moment to understand what tariffs actually are.

If you’re unfamiliar with the term, think of tariffs as taxes imposed on goods imported from other countries. These taxes increase the price of foreign goods, making them less competitive in the domestic market.

Trump originally proposed imposing a 25% tariff on goods shipped from Canada and Mexico.

This means that if a product was worth $4, an additional $1 charge would be applied. A separate 10% tariff on goods imported from China was also scheduled to take effect on 4 February at 00:01 EDT (05:01 GMT).

Canada and Mexico’s Agreements with the US

Following last-minute negotiations, both Canada and Mexico struck border security deals with Trump to avoid these tariffs for now.

Canadian Prime Minister Justin Trudeau agreed to reinforce his country’s border with the US to curb illegal migration and the trafficking of the deadly drug fentanyl.

Canada is implementing a $1.3 billion (£1 billion) border plan, which includes deploying nearly 10,000 frontline workers, enhancing coordination with US law enforcement, increasing information sharing between both countries, limiting border traffic, and using drones and Black Hawk helicopters for surveillance.

Additionally, Canada will appoint a “fentanyl czar” and launch a joint strike force with the US to combat crime, fentanyl trafficking, and money laundering. Much of this border security plan had already been announced in December.

Earlier, Trump reached a similar deal with Mexican President Claudia Sheinbaum. Mexico agreed to reinforce its northern border with 10,000 National Guard troops in exchange for the US limiting the flow of firearms into the country.

Trump’s Justification for Tariffs

Trump had previously argued that tariffs were necessary to “protect” Americans from the “major threat of illegal aliens and deadly drugs” including fentanyl.

However, after calls with Trudeau and Sheinbaum on Monday, he agreed to delay their implementation.

Following two phone calls on Monday, Trump and Trudeau announced on social media that they had reached a temporary agreement on border security, effectively postponing tariffs for at least 30 days.

Both leaders presented the agreement as a “win”.

Meanwhile, Trump hinted that tariffs on EU goods could be coming “pretty soon” but suggested a deal could be “worked out” with the UK. He also floated the idea of an additional 10% across-the-board tariff on all goods imported into the US.

The tariffs on China will still take place.

As tensions in global trade remain high, all eyes are on whether these temporary compromises will eventually become long-term solutions — or if new tariff threats will emerge in the coming months.