U.S. President Donald Trump has agreed to delay imposing 25% tariffs on Canada and Mexico for 30 days after reaching separate agreements with the two North American neighbors, easing trade tensions.
The 30-day reprieve came after both Canada and Mexico agreed to intensify efforts to block illicit drugs and migrants and offered new border security plans.
Canada has pledged to bolster border security and curb fentanyl trafficking, while Mexico has agreed to deploy troops along its northern border in exchange for reduced gun flows from the U.S.
Meanwhile, a 10% tariff on Chinese imports has taken effect, escalating tensions with Beijing, which has announced retaliatory measures on key American exports.
Trump pauses tariffs for 30 days after speaking with Trudeau
Trump agreed to postpone imposing tariffs on Canada after a last-minute agreement with Canadian Prime Minister Justin Trudeau.
Trudeau announced a $1.3 billion border security plan that includes nearly 10,000 frontline workers, enhanced coordination with US law enforcement, and increased surveillance using drones and Black Hawk helicopters. Canada will also appoint a “fentanyl czar” and form a joint strike force with the US to combat fentanyl trafficking and money laundering.
Trump hailed the agreement as a success, writing on his social media site Truth Social, “As president, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome.”
Trump halts tariffs on Mexico
Earlier, Trump struck a similar deal with Mexican President Claudia Sheinbaum, who agreed to deploy 10,000 National Guard troops to the northern border. In return, the US pledged to curb the flow of firearms into Mexico.
Sheinbaum confirmed the agreement on X, calling it a “good conversation with great respect for our relationship and sovereignty.” Trump described their discussion as “very friendly.”
In 2019, Mexico deployed 15,000 soldiers to its northern border under a previous deal with Trump to avoid tariffs.
Trump imposes 10% tariff on goods
While Canada and Mexico secured temporary relief, a 10% US tariff on Chinese imports took effect after a deadline passed early Tuesday. Trump described it as the “opening salvo” and warned of further increases if a trade deal is not reached.
China announces retaliatory tariffs
Shortly after, China announced retaliatory tariffs, including a 15% tariff on certain types of coal and liquefied natural gas, and a 10% tax on crude oil, agricultural machinery, large-displacement cars, and pickup trucks. The tariffs are effective February 10.
Additionally, The Ministry of Commerce and China’s customs administration has implemented immediate export controls on over two dozen metal products, including tungsten and tellurium. Tungsten is a critical mineral typically used in industrial and defense applications, and tellurium can be used to make solar cells.
The ministry also added U.S. firms Illumina and PVH Group to its unreliable entities list, accusing them of violating “normal market trading principles.”.
Meanwhile, China’s State Administration for Market Regulation has launched an antitrust investigation into Google for suspected violation of its anti-monopoly.
“The measures are fairly modest, at least relative to US moves, and have clearly been calibrated to try to send a message to the US (and domestic audiences) without inflicting too much damage,” Julian Evans-Pritchard, head of China Economics at financial insight firm Capital Economics, said in a research note. The Chinese tariffs target at most $20 billion of the country’s annual imports from the U.S., about 12% of the total, which is a small amount compared to more than $450 billion in Chinese goods being targeted by the United States, he added.