Trump pauses tariffs on most goods from Mexico and some from Canada

Donald Trump has announced that most goods imported from Mexico and some from Canada are to be exempt from his trade tariff regime for at least four weeks, just days after the charges were imposed.

"We are working hard, together, on the border, both in terms of stopping illegal aliens from entering the United States and, likewise, stopping fentanyl," the president posted on his Truth Social platform after first relaxing his sanctions against Mexico.

He often gives both issues as reasons for the tariffs.

The latest climbdown came after he surprised financial markets 24 hours earlier by waiving tariffs against carmakers following pleas from motor industry bosses.

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The White House said that 62% of Canadian imports would still be subject to 25% tariffs because they were not compliant with a trade deal - USMCA (US Mexico and Canada) - struck in 2020.

News that Canadian goods which met the USMCA criteria were being spared tariffs until 2 April followed hours after the same concession was agreed between Mr Trump and his Mexican counterpart.

A tariff of 10% was to remain on potash - a fertiliser used by farmers - and Mr Trump added that the auto tariffs would definitely return next month.

The White House revealed some details. Parts due to flow into the US from Mexico and Canada as part of the manufacturing supply chain would not qualify for tariffs so long as they complied with the USMCA deal.

'Rules of origin' guidelines under the agreement allow goods to move between the three countries tariff-free if they qualify with a designation that they were made in North America.

US commerce secretary Howard Lutnick told Sky's US partner network CNBC that, taken together, more than half of usual cross border trade volumes would be exempt under the expanded concessions.

He too signalled there were signs of progress in the dispute with America's closest trading partners, saying each had worked hard to make progress in tackling imports of Fentanyl - blamed for high crime and deaths in US communities.

But Mr Lutnick explained that, as things stand, the reprieve would only last until 2 April when the Trump administration plans to impose reciprocal tariffs - on top of the 25% charges that came into force on Tuesday.

At the same time, Mr Trump is under intense pressure to relax his tariff regime permanently amid a backlash from US firms and financial market investors who fear it is self defeating.

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A closely-watched forecast has even suggested that the threats of a trade war were enough to push the US economy into recession before Mr Trump took office.

The dollar has sunk in value and US government borrowing costs have risen on the back of the turmoil.

US stock markets were also feeling the pressure again with the tech-heavy Nasdaq on course to fall by more than 3% on the day.

It is widely expected that the European Union will be next to face tariffs - possibly from 2 April - after Mr Trump threatened action "very soon" just last week.

Commenting on the threat to the eurozone from such a move, the president of the European Central Bank Christine Lagarde said on Thursday: "Just the threat of those tariff increases and potential retaliations are putting a brake on - on investment, on consumption decisions, on employment, hiring, all the rest of it."

While Mr Trump has not issued a specific threat against the UK, her counterpart at the Bank of England Andrew Bailey told a committee of MPs on Wednesday that the US should work "multi-laterally" rather than bilaterally to resolve its disputes.

(c) Sky News 2025: Trump pauses tariffs on most goods from Mexico and some from Canada