On Monday, Mexican President Claudia Sheinbaum and US President Donald Trump announced an agreement to pause the implementation of 25% U.S.-Mexico tariffs for one month.
“We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements,” Sheinbaum tweeted.
In exchange for the reprieve, Mexico will deploy 10,000 members of the National Guard along its northern border to combat drug trafficking, particularly fentanyl. The U.S. pledged to increase efforts to prevent the smuggling of high-powered weapons into Mexico.
“We further agreed to immediately pause the anticipated tariffs for one month, during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico,” Trump said in a social media post.
Relief for U.S. Businesses and Consumers
The U.S.-Mexico tariffs pause brings relief to American businesses and consumers who feared significant price hikes. Grocery stores, which rely heavily on Mexican imports, were particularly concerned.
Scott Lincicome, vice president of general economics at the Cato Institute, highlighted the impact on produce costs. “Grocery stores operate on really tiny margins,” Lincicome said. “They can’t eat the tariffs, especially when you talk about things like avocados, which basically all of them — 90% — come from Mexico. You’re talking about guacamole tariffs right before the Super Bowl.”
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Leslie G. Sarasin, president and CEO of FMI – The Food Industry Association, emphasized the importance of imports for year-round product availability.
“With 1.6% retail and 7.5% food manufacturing net margins, tariffs will put incredible pressure on our members,” Sarasin said. “New tariffs will also drive up the cost of doing business and food prices at a time consumers are extremely concerned about prices.”
Concerns Remain Over Trade Relations with Canada and China
The U.S.-Mexico tariffs pause agreement does not affect the proposed 25% tariffs on Canadian imports or the 10% tariffs on Chinese goods.
Talks between President Trump and Canadian Prime Minister Justin Trudeau continued searching for a solution to stop the implementation of tariffs that should come into effect on Tuesday.
Canada warned that the government is willing to respond by implementing 25% tariffs on $155 million worth of U.S. goods.
Meanwhile, the retail and manufacturing sectors continue to express concern.
David French, executive vice president of government relations at the National Retail Federation, urged ongoing negotiations.
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” French said. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to avoid shifting the costs of shared policy failures onto the backs of American families, workers, and small businesses.”
Consumer Goods Industry Warns of Rising Costs
Tom Madrecki, vice president of supply chain resiliency at the Consumer Brands Association, highlighted the risk of inflation if U.S.-Mexico tariffs remain a possibility.
“Tariffs on all imported goods from Mexico and Canada – especially on ingredients and inputs that aren’t available in the U.S. – could lead to higher consumer prices and retaliation against U.S. exporters,” Madrecki said.
Looking Forward: Hope for a Long-Term Solution
The one-month U.S.-Mexico tariffs pause allows Mexico and the United States to reach a permanent trade resolution.
Sheinbaum expressed optimism that further agreements could strengthen trade relations. “We hope this pause will create space for productive dialogue,” she wrote.
While business leaders welcome the temporary relief, they urge long-term solutions that stabilize supply chains and protect consumers from rising costs.