President Donald Trump has signed orders expanding exemptions for goods from Canada and Mexico, easing some of the trade restrictions imposed earlier this week. This marks the second time in two days that Trump has scaled back tariffs on the U.S.’s two largest trading partners, amid growing concerns from businesses and financial markets.
On Wednesday, Trump announced a temporary exemption for carmakers from a 25% import tariff—just one day after the levy took effect. Mexican President Claudia Sheinbaum welcomed the decision, while Canada’s finance minister confirmed that Ottawa would pause its plans for additional retaliatory tariffs on U.S. products.
Despite the exemptions, tensions remain high. Canadian Prime Minister Justin Trudeau described a “colorful” phone call with Trump about the tariffs, with reports indicating a heated exchange. “Our goal remains to get all tariffs removed,” Trudeau said, warning that trade disputes are likely to persist. Meanwhile, Sheinbaum said her discussion with Trump was “excellent and respectful,” emphasizing cooperation on curbing fentanyl trafficking and illegal gun trade.
The tariff carveouts apply to goods traded under the United States-Mexico-Canada Agreement (USMCA), including televisions, air conditioners, avocados, and beef. Additionally, tariffs on potash—an essential fertilizer ingredient—were reduced from 25% to 10%. However, about 50% of U.S. imports from Mexico and 62% from Canada may still face tariffs.
While Trump adjusted some measures, his administration remains committed to broader trade policies, with new “reciprocal” tariffs on other countries set to be unveiled on April 2. The uncertainty has rattled markets, with the S&P 500 dropping nearly 1.8% on Thursday.
Ontario Premier Doug Ford criticized the tariff relief as insufficient, and Treasury Secretary Scott Bessent warned that retaliation from Canada could lead to higher tariffs. Trade experts caution that the escalating dispute could raise prices for U.S. consumers while harming the economies of all three countries.
Despite challenges, some American businesses remain resilient. Gregory Brown, CEO of trailer manufacturer BenLee, said customers have accepted higher prices due to tariffs. “It’s a great growth economy,” he noted, adding that Trump’s quick tariff adjustments reflect his understanding of business realities.
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