President Trump on Thursday signed off on tariff exemptions for imports from Canada and Mexico that are covered under a 2020 North American trade agreement, marking the latest reversal of duties imposed earlier this week.
Under the orders, goods compliant with the U.S.-Mexico-Canada Agreement (USMCA) will not be tariffed until April 2, at which point Trump has pledged to impose reciprocal tariffs on other nations with duties on American imports.
One of the orders also stipulates that tariffs on Canadian potash, a key ingredient in fertilizer, be lowered from 25 percent to 10 percent.
The move comes hours after Trump said Mexican imports covered under the USMCA would be exempted, and one day after he said auto imports included in the USMCA would not be tariffed. The exemption also applies to auto parts used in the assembly of cars.
“USMCA-compliant goods will not have a tariff for the next month, until April 2. That includes autos, and the autos were the lead in getting this done, but also Canada and Mexico have done a good job offering us ever more work to prove to us they’re going to cut the fentanyl deaths,” Commerce Secretary Howard Lutnick said in a statement.
“On April 2, we’re going to move into the reciprocal tariff, and hopefully Mexico and Canada will have done a good enough job on fentanyl that this part of the conversation will be off the table, and we’ll move just to the reciprocal tariff conversation,” Lutnick added.
White House officials indicated many imports would still be subject to tariffs in the meantime. Officials said roughly 62 percent of imports from Canada are not covered by USMCA and would still be subject to tariffs, while 50 percent of imports from Mexico are not USMCA-compliant.
Trump on Tuesday imposed 25 percent tariffs on imports from Canada and Mexico, as well as an additional 10 percent tariff on Chinese goods. He cited frustration over the flow of fentanyl into the United States, though experts have noted relatively little fentanyl enters the country through the northern border in particular compared to the southern border.
White House officials have argued Trump’s tariffs should be seen not through the lens of a trade war, but through the lens of a war against fentanyl, which kills thousands of Americans each year.
Still, the White House’s unpredictable approach on tariffs has rattled financial markets, with the Dow Jones Industrial Average, the Nasdaq and the S&P 500 all taking on losses earlier in the week.
Trump has promised more tariffs coming down the pike. He has pledged to begin imposing reciprocal tariffs starting in early April on other nations that have duties on U.S. imports, as well as sector-specific tariffs in the coming weeks on auto imports, semiconductors, pharmaceuticals and certain other materials. Some corporate leaders have warned that the tariffs are likely to lead to higher prices of goods.
