North American trade war paused – for now – after promises from Canada and Mexico

The trade war between the U.S. and its closest trading partners has been postponed — for now.

Tariffs threatened against goods entering the U.S. from Canada and Mexico will not go into effect on Tuesday as originally planned by President Trump, after the leaders of the three nations spoke separately Monday and reached agreement on how their shared borders will be policed.

Trump’s threat of 25% duties on Canadian and Mexican goods and 10% tariffs on Canadian energy were enough to get Prime Minister Justin Trudeau and President Claudia Sheinbaum Pardo to the table, the 47th President said Monday.

“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, and the Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured. FAIRNESS FOR ALL,” Trump wrote via his Truth Social Media platform.

“Canada has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of Americans, while destroying their families and communities all across our Country,” he wrote.

Hours earlier Trump declared that he’d had a “very friendly conversation” with Sheinbaum “wherein she agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States.”

“We further agreed to immediately pause the anticipated tariffs for a one month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico,” he wrote.

Trudeau said that a deal to avoid tariffs had been reached after he’d apparently assured the U.S. president that Canada was in the process  of “implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl.”

According to the out-going Canadian leader, he’s signed a new “intelligence directive” aimed at organized crime and is backing it with an investment of $138 million. Trudeau says that “nearly 10,000 frontline personnel are and will be working on protecting the border.”

“In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering,” he said.

Sheinbaum said via social media that she’d had “a good conversation with President Trump” during which the pair discussed “our relationship and sovereignty” and reached several agreements.

First is that Mexico will deploy troops as indicated by the U.S. president. Second, Sheinbaum said the U.S. has “committed to working to prevent the trafficking of high-powered weapons to Mexico,” which she says are used by the drug cartels to commit violence. Sheinbaum said that the U.S. and Mexico will “begin working today on two fronts: security and trade,” and that the U.S. would pause tariffs.

“We are a free, independent, and sovereign country,” she said in a later post, according to a translation.

The back and forth comes after Trump, late Saturday, declared he would impose tariffs entering the U.S. from Mexico and Canada, the nation’s closest trading partners. Trump, who signed “the largest, most significant, modern, and balanced trade agreement in history” with the two nations during his first term as president, said the tariffs would help stop synthetic opioids from crossing the borders and cease the flow of illegal immigrants into the U.S.

Both nations responded by promising tariffs of their own.

The potential for a tariffs was enough to rock the stock markets, which opened down dramatically Monday but rebounded to close just slightly lower for the day, and the Wall Street Journal’s editorial board dubbed Trump’s tariff threats “the dumbest trade war in history.”

According to Jim Rooney, the President of the Greater Boston Chamber of Commerce, the best way to for the president to put “American citizens and businesses first” is by considering the impact tariffs will have on the communities and industries depending on trade with our allies.

“Massachusetts has long thrived with strong trade relationships, including beneficial and necessary trade arrangements with Canada. Our businesses and residents depend on Canadian products – from lumber to construct housing to dairy products, energy and more. With sweeping tariffs, our costs of doing business and our local supply chains will suffer, ultimately causing negative, long-lasting impacts on businesses of all sizes and the daily lives of people,” he told the Herald.

Trump also issued 10% tariffs on Chinese imports over the weekend, but made no mention of the repeal on Monday.