U.S. President Donald Trump has delayed for one month 25% import duties on goods from Canada and Mexico that are covered by the existing North American trade agreement.
The United States-Mexico-Canada Agreement (USMCA), which was struck during Trump’s first term in office and replaced the North American Free Trade Agreement (NAFTA), covers most goods and services that are traded between the three nations.
News that Trump has rolled back most of the 25% import tariffs on Canada and Mexico comes a day after the U.S. president paused for one month the tariffs applied to the automotive industry.
Trump was also considering an exemption for agriculture products that are traded between America, Mexico and Canada.
The backpedaling comes as the U.S. stock market declined sharply after the blanket tariffs were imposed on March 4.
The blue-chip Dow Jones Industrial Average has dropped more than 1,000 points in two days and the technology-laden Nasdaq Composite index has fallen into a correction, defined as a decline of 10% or more from recent highs.
However, despite Trump’s tariff rollbacks, Canada is keeping its current reciprocal tariffs on $30 billion worth of goods from U.S. exporters in place.
The Canadian government has also said that it stands ready to move forward with a second round of tariffs that target $125 billion of American imports into the country.
Ontario Premier Doug Ford says his government is moving forward with plans to apply a 25% surcharge to electricity exports sent to neighboring American states starting on March 10.
And British Columbia is planning to implement a new toll on U.S. transport trucks traveling through the province enroute to Alaska.
Trump has said that the pause on tariffs imposed on Canadian and Mexican goods will only last until April 2 of this year.
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