President Trump on Thursday exempted most goods from Canada and Mexico covered under the U.S.-Mexico-Canada Agreement (USMCA) from his 25% tariffs for the next month.
The tariffs went into effect earlier this week and will now be reinstated April 2.
On Tuesday, Trump imposed the 25% tariffs on the United States’ largest trading partners.
‘If you are the administration and are trying to achieve — the outcomes they are trying to achieve, refused fentanyl, lower border crossings — these are a tool in the arsenal,’ Dan Greenhouse of Solus Alternative Asset Management told Fox News Thursday.
Doug Holtz-Eakin, the president of the American Action Forum, didn’t agree.
He told Fox News, ‘In the end, we’ve got taxes on American consumers and businesses. Those taxes are substantial. I think people underappreciate that this round taken at face value would be roughly four times larger than anything he did in his first presidency. The impacts would be substantial.’
Holtz-Eakin said it would add to inflation and slow economic growth.
‘Those are not things that the American people want,’ he said.
Canada said earlier this week it will issue 25% retaliatory tariffs.
A Canadian source told Reuters the country wouldn’t respond until it had seen the entirety of Trump’s amended tariff order.
Trump announced the tariffs on his first day in office in January after declaring fentanyl deaths a national emergency. He said the drug makes its way from China to the U.S. via Mexican and Canadian imports.
‘I can confirm that we will continue to be in a trade war that was launched by the United States for the foreseeable future,’ Canadian Prime Minister Justin Trudeau, who will step down Sunday, told reporters Thursday.
Trump has also imposed a 20% tariff on all Chinese goods.
Trump had mentioned an exemption for Mexico earlier Thursday, but the new amendment also covers Canada.
‘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,’ Trump wrote Thursday before including Canada in the exemption.
‘This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum. 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!’
Reuters contributed to this report.