Trump Grants Tariff Exemption to Mexico Under Trade Pact with Canada Until April 2

US President Donald Trump has said Mexico will not be required to pay tariffs on goods that come under the trade pact between the two countries and Canada until 2 April.

Trump has not confirmed if the suspension also applies to Canada, but its northern neighbour is expecting an exemption of the “same nature”, a Canadian government source told the BBC.

The latest move is the second climbdown in two days from Trump on his tariffs.

On Wednesday he said he would temporarily spare carmakers from 25% import taxes just a day after they came into effect.

Commerce Secretary Howard Lutnick told CNBC earlier on Thursday that the temporary exemption of tariffs for car part imports from Canada and Mexico could be extended to all products that are part of the United States-Mexico-Canada Agreement (USMCA).

The USMCA was established during Trump’s first term of office. Its 34 chapters covered cars, dairy and lumber amongst other things such as financial services, and the agreement included a review every six years.

On Thursday, Trump wrote on Truth Social that Mexico would be exempt until 2 April.

“After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement,” he said.

Sheinbaum said she had an “excellent and respectful” call with Trump, adding that the two countries would work together to stem the flow of the opioid fentanyl from Mexico into the US and curb the trafficking of guns going the other way.

An exemption for Canada is expected to be announced later, despite Trump attacking Canadian Prime Minister Justin Trudeau on social media earlier on Thursday by saying he’s done a “terrible job” for Canada.

Trudeau said that discussions with officials within the Trump administration are ongoing, with the goal to get “all tariffs removed”.

But Ontario Premier Doug Ford told CNN that the province would go ahead with a 25% tariff on the electricity it provides to 1.5 million homes and businesses in New York, Michigan and Minnesota from Monday.

The USMCA came into force in 2020 after years of negotiations and revisions. It was a revamp of the North American Free Trade Agreement, which was created in 1994.

Goods worth billions cross the borders of the US, Canada and Mexico each day and their economies are deeply integrated.

The introduction of tariffs has sparked a trade war between the US, its neighbours and also China.