President Donald Trump announced Thursday a temporary pause on tariffs for certain goods imported from Mexico and Canada, just two days after imposing sweeping trade measures.
The decision, which will remain in place until April 2, has left businesses and investors navigating the unpredictability of U.S. trade policy.
Tariff Exemptions Under USMCA
Following a call with Mexican President Claudia Sheinbaum, Trump declared that Mexico would not have to pay tariffs on products covered under the U.S.-Mexico-Canada Agreement (USMCA). Shortly after, he confirmed that Canada would receive similar exemptions.
“Mexico was treated with great respect,” Sheinbaum said during a press briefing. “We reached an agreement that benefits both nations while maintaining cooperation within a framework of mutual respect.”
The exemptions apply to nearly 50% of Mexican goods and 38% of Canadian imports that qualify under USMCA.
However, according to news reports, certain Canadian energy products will still be subject to a 10% tariff, and goods such as computers from Mexico will continue to be a 25% tariff.
Economic and Market Reactions
Trump dismissed concerns that the tariff reversal was linked to recent market turbulence. The S&P 500 fell 1.8% on Thursday as investors reacted to shifting trade policies. “I’m not even looking at the market,” Trump claimed.
Despite his assertion, market analysts point to the ongoing tariff fluctuations as a key factor in recent Wall Street losses. The Dow Jones Industrial Average and the S&P 500 are experiencing their worst week since September.
Impact on Agriculture and Trade Policy
U.S. Secretary of Agriculture Brooke Rollins praised the decision to reduce tariffs on potash—a key fertilizer ingredient—from 25% to 10%, citing its importance for American farmers.
“This is a critical step in helping farmers manage and secure key input costs during planting season while reinforcing long-term agricultural trade relations,” Rollins said.
Industry groups also welcomed the move. Leslie G. Sarasin, President and CEO of FMI – The Food Industry Association, expressed gratitude for the tariff suspension and emphasized its role in maintaining affordable food prices.
“We are pleased the President took action by suspending these tariffs, allowing him to follow through with his promise to make groceries more affordable for hardworking families,” Sarasin said.
Related Article: Decoding Tariffs: IFPA’s Essential Resources
Concerns From Independent Grocers
The National Grocers Association (NGA), which represents independent supermarkets, called for a more comprehensive approach to trade issues. NGA President Greg Ferrara urged the administration to address broader economic challenges, including inflation and credit card fees while negotiating with trading partners.
“Tariffs can be powerful tools in trade and foreign policy,” Ferrara said. “However, as the White House engages in negotiations, it is critical to take decisive action on cost pressures facing independent grocers.”
Looking Ahead: April 2 Tariffs Deadline
While the tariff pause offers temporary relief, the administration plans another round of trade measures in April. A major internal report on the use of tariffs is expected to be submitted to the White House on April 1. Many economic analysts expect the president to impose tariffs on other nations because of the report.
As Trump reassesses his trade strategy with key North American partners, businesses and consumers will closely watch for further developments.