• Donald Trump paused tariffs on Mexico for one month after talks with Claudia Sheinbaum. 
• Sheinbaum agreed to send 10,000 troops to the US-Mexico border. 
• Talks with Canada stalled, with Trump claiming the tariffs were about a “drug war”. 

US President Donald Trump paused tariffs on Mexico for one month after last-minute talks – but there was no breakthrough yet in negotiations with Canada on an issue that has sparked fears of a global trade war. 

As world markets slumped, Trump and his Mexican counterpart President Claudia Sheinbaum both announced the halt in the levies after she agreed to send 10,000 troops to the US-Mexico border following talks this week. 

Trump said on his Truth Social network that after the “very friendly conversation” he had “agreed to immediately pause the anticipated tariffs for a one month period”. 

During that time there would be further talks “as we attempt to achieve a ‘deal’ between our two Countries”, the Republican said. 

Leftist Sheinbaum had announced the tariff pause a few minutes earlier, saying she had a “good conversation with President Trump with great respect for our relationship and sovereignty”. 

Trump agreed to increase measures to prevent trafficking of US weapons into Mexico, she said – a point that did not appear in Trump’s statement. 

The development came hours before the 25% levies that Trump has ordered on imports from the US neighbours and chief trading partners – plus an extra 10% on China – were due to take effect at midnight on Tuesday. 

Trump said he had also spoken to Canadian Prime Minister Justin Trudeau on Monday and was due to speak again at 3pm (8pm GMT) – but the White House said negotiations with Ottawa were not going as well. 

Justin Trudeau, Canada's prime minister. Canada has vowed to respond strongly to the tariffs. Photo / Getty Images 

Trump repeated his frequent claims that the United States is being unfairly treated by trade while pushing his argument that the tariffs were about a “drug war” from opioids “pouring through the Borders of Mexico and Canada”. 

US Government figures show that only a minimal quantity of drugs comes via Canada. 

Spiralling fears of a global trade war had earlier sent US, European and Asian markets into a fall. 

Wall Street stocks opened sharply lower, a European push lower was driven by Frankfurt and Paris with falls of around 2%, and Asian equity markets mostly slid by the close. 

The Mexican peso and Canadian dollar also sank against the greenback, while oil jumped despite Trump limiting the levy on Canada’s energy imports at 10% to avoid a spike in fuel prices. 

The White House said earlier there had been a “heck of a lot of talks” over the weekend – and that they had gone better with Mexico than Canada. 

“This is not a trade war, this is a drug war,” National Economic Council Director Kevin Hassett told CNBC. 

“The Mexicans are very, very serious about doing what President Trump said” in his order imposing the tariffs, he said. “But the Canadians appeared to have misunderstood the plain language.” 

Canada has vowed to respond strongly to the tariffs. 

Its most populous province Ontario on Monday banned US firms from bidding on tens of billions of dollars in government contracts – and dumped a deal with Musk’s Starlink. 

Musk is running a cost-cutting drive in Trump’s White House that, in a separate development, could shut down the US Agency for International Development. 

“Ontario won’t do business with people hellbent on destroying our economy,” Ontario Premier Doug Ford said on X. 

Trump has upped the pressure recently by calling Canada’s existence into question – calling again as recently as Sunday for it to become the 51st US state. 

The US President – who has said that tariff is the “most beautiful word in the dictionary” – is going even further in his second term on the levies than he did in his first. 

He has insisted that the impact would be borne by foreign exporters without being passed on to American consumers, despite most experts saying the contrary. 

But the billionaire 78-year-old did acknowledge on Sunday that Americans might feel economic “pain”. 

“We may have short term a little pain, and people understand that,” Trump told reporters as he returned to Washington on Sunday from a weekend at his Florida resort. 

“But long term, the United States has been ripped off by virtually every country in the world.” 

Trump has also wielded tariffs as a threat to achieve his wider policy goals, most recently when he said he would slap them on Colombia when it turned back US military planes carrying deported migrants. 

-Danny Kemp and Daniel Rook, AFP