President Donald Trump announced he’s giving Mexico a temporary break from the new 25% tariffs that went into effect on Tuesday, saying the exemption will last until April 2. The break only applies to goods that follow the U.S.-Mexico-Canada Agreement (USMCA) rules, the trade deal Trump signed during his first term.
Trump shared the news on Truth Social after talking with Mexico’s President Claudia Sheinbaum. “I did this as an accommodation and out of respect for President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!” Trump posted.
Under USMCA, goods can move between the U.S., Mexico, and Canada without tariffs if they meet certain rules — like being mostly made in North America. For example, cars must be at least 75% North American-made to qualify.
The 25% tariffs, which apply to imports from Mexico and Canada, sparked a stock market sell-off and company warnings that prices could rise on everything from food and cars to new homes.
The day after the tariffs started, the White House said cars that meet USMCA rules could skip the tariff. According to Anderson Economic Group, that saved automakers from price hikes of $4,000 to $10,000 per car.
Trump said the tariffs were meant to pressure Mexico and Canada to help fight fentanyl trafficking, though data shows less than 1% of fentanyl seized at the border comes from Canada. Commerce Secretary Howard Lutnick said Thursday that Canada could also get a break if its goods follow USMCA rules, but that hasn’t been confirmed.
In a Thursday press conference, Sheinbaum said she showed Trump a U.S. Customs and Border Protection graph proving fentanyl seizures at the U.S.-Mexico border dropped 41.5% in February. “He didn’t know about this graph until I sent it to him,” Sheinbaum said.
Trump also spoke with Canadian Prime Minister Justin Trudeau, who said Canadian fentanyl seizures dropped 97% from December to January. Still, Trump criticized Trudeau on Truth Social, writing: “Believe it or not, despite the terrible job he’s done for Canada, I think that Justin Trudeau is using the Tariff problem, which he has largely caused, in order to run again for Prime Minister. So much fun to watch!”
For now, Mexico gets the break — but Canada’s status is still up in the air.