US President Donald Trump has delayed tariffs on Canadian and Mexican imports, providing temporary relief to companies and consumers after financial markets took a hit. The tariffs, which went into effect on Tuesday, sparked concerns among economists that they could hinder US growth and drive up inflation.
Trump’s decision to delay the tariffs until April 2 came after he signed orders exempting certain imports covered by the United States-Mexico-Canada Agreement (USMCA). This move is expected to benefit American car manufacturers, with Trump stating that conditions are now “much more favorable” for them.
In response to Trump’s decision, Canadian Finance Minister Dominic LeBlanc announced that Canada would not impose its planned tariffs on $125 billion worth of US products until April 2. Trump, however, warned that more tariffs would be introduced on April 2, describing them as “reciprocal in nature.”
The US president also confirmed that broad tariffs on steel and aluminum imports would remain in place, despite criticism from Canadian Prime Minister Justin Trudeau. Trudeau vowed to continue fighting against the tariffs, stating that Ottawa’s goal is to have all tariffs removed.
According to Scott Lincicome, vice president of general economics at the Cato Institute, Trump’s easing of tariffs is “a recognition of economic reality.” Lincicome noted that tariffs disrupt supply chains, burden Americans, and create uncertainty in the market.