US Pauses Tariffs Ahead of Crypto Summit White House
The move is seen as a positive development ahead of the crypto summit at the White House, where trade and economic issues are expected to be discussed. The US and Canada have been engaged in a trade war since June 2018, with the US imposing tariffs on Canadian steel and aluminum, and Canada retaliating with tariffs on US goods.
US President Donald Trump has paused tariffs on imports from Mexico and Canada, exempting goods under the US-Mexico-Canada Agreement (USMCA) for a month, in a move that could ease tensions between the three countries ahead of the crypto summit at the White House.
The 25% tariffs, which were set to take effect on Tuesday, will be suspended until April 2, applying to about 49% of Mexico's exports to the US, worth around $249.7 billion, and 38% of Canada's exports to the US, worth around $156.9 billion. This reprieve is a significant development in the trade relations between the three countries, which have been strained since the US imposed tariffs on Canadian steel and aluminum in June 2018.
The USMCA agreement, which replaced the North American Free Trade Agreement (NAFTA), is a free-trade agreement between the three countries. Trump's decision follows a phone call with Mexican President Claudia Sheinbaum, with whom he discussed undocumented migration and fentanyl regulation. Canada's exports of steel and aluminum, which are also subject to separate 25% tariffs, are not included in the reprieve.
The pause does not fully cover energy products, on which Trump has imposed a separate 10% tariff. Mexico and Canada have responded to the news, with Mexico's president expressing a positive tone and Canada delaying its retaliatory tariffs until April 2. Canadian Prime Minister Justin Trudeau has expressed skepticism, saying a trade war between the US and Canada is possible.
The US and Canada have a long history of free trade, with billions of dollars in goods crossing their borders every day. Trump has argued that introducing tariffs will protect American industry and boost manufacturing, but many economists say tariffs could lead to prices rising for consumers in the US, while warning they could trigger severe economic downturns in Mexico and Canada.
