• Donald Trump delayed tariffs on Canadian and Mexican imports, offering relief to carmakers until April 2.
• Canadian Finance Minister Dominic LeBlanc said Canada would pause counter-tariffs on $125 billion of US products.
• Trump’s move followed market turmoil and discussions with US carmakers, but stock markets still slumped.

United States President Donald Trump has delayed some tariffs targeting Canada and Mexico in moves that will bring reprieve to companies and consumers after blowback on financial markets.

Stock markets tumbled after Trump’s duties of up to 25% took effect on Tuesday as economists warned that blanket levies could damage US growth and raise inflation.

Trump signed orders on Thursday to delay the fresh tariffs for Canadian and Mexican imports covered by a North American trade agreement, though he dismissed suggestions that his decisions were linked to market turmoil.

The halt – which will last until April 2 – offers relief to carmakers, whose parts cross North American borders multiple times during production.

After talks with the “Big Three” US carmakers – Stellantis, Ford and General Motors – the Administration initially announced a one-month exemption on cars coming through the United States-Mexico-Canada Agreement (USMCA).

A White House official said about 62% of Canadian imports would still face the new tariffs, although many of these were energy products hit by a lower rate of 10%.

About half of Mexico’s imports come through the USMCA.

The latest moves make conditions “much more favourable for our American car manufacturers”, Trump said.

Shortly after the delays were announced, Canadian Finance Minister Dominic LeBlanc wrote on X that his country “will not proceed with the second wave of tariffs on $125b of US products until April 2 while we continue to work for the removal of all tariffs”.

Trump said more tariffs would come on April 2, adding that they would be “reciprocal in nature”. He had earlier vowed reciprocal levies to remedy practices the US deemed unfair.

Canadian Prime Minister Justin Trudeau has warned his country will remain in a trade war with the US for “the foreseeable future”. Photo / AFP

At that point, Canadian and Mexican goods could still face levies.

Trump also said he would not modify broad tariffs for steel and aluminium imports, which are due to take effect next week.

US stock markets slumped again today despite the partial tariff delay.

Trump told reporters in the Oval Office that he had a “very good conversation” with Mexican President Claudia Sheinbaum.

He claimed “tremendous progress” on both illegal immigration and drugs coming into the US – both reasons he has cited in imposing levies on Mexico, Canada and China.

His remarks stood in sharp contrast to simmering tensions with Canadian Prime Minister Justin Trudeau.

Trudeau said Canada would remain in a trade war with the US for “the foreseeable future” even if there were “breaks for certain sectors”.

“Our goal remains to get these tariffs, all tariffs, removed,” Trudeau added.

Canada contributes less than 1% of fentanyl to the illicit US supply, according to Canadian and US government data.

China, meanwhile, has pushed back on US allegations of its role in the fentanyl supply chain, calling this a domestic issue that tariffs will not resolve.

For Scott Lincicome, vice-president of general economics at the Cato Institute, Trump’s easing of tariffs was “a recognition of economic reality”.

The move was an acknowledgment that tariffs disrupted supply chains, that the burden of levies fell on Americans and “that the market doesn’t like them and certainly doesn’t like the uncertainty surrounding them”, Lincicome told AFP.

Since taking office for his second term in January, Trump has made tariff threats against allies and adversaries alike.

US Treasury Secretary Scott Bessent said he was not concerned that Trump’s tariffs would be inflationary, adding that any impact on prices was likely to be temporary.

He told the Economic Club of New York that “access to cheap goods is not the essence of the American Dream”, saying this was instead rooted in the idea that citizens could achieve upward mobility and economic security.

Trump has referred to tariffs as a source of US government revenue and a way to remedy trade imbalances.

The US trade deficit surged to a new record in January, ballooning 34% to $131.4 billion as imports rose.

Analysts say the deficit was likely bolstered by gold imports, but that data suggests businesses were also trying to get ahead of tariffs.

© Agence France-Presse