Following the imposition of new tariffs earlier this week, US President Donald Trump has signed orders expanding exemptions for certain goods from Canada and Mexico, the second reversal as businesses and markets react to trade uncertainty.
Mexican President Claudia Sheinbaum approved the decision, calling her conversation with Trump ‘excellent and respectful,’ while Canadian Prime Minister Justin Trudeau described his phone call with Trump as ‘colorful.’ Nevertheless, Trudeau pointed out that a trade war between allies is still likely, saying, “Our goal remains to get these tariffs, all tariffs, removed.”
In the face of these exemptions, around 50% and 62% of imports from Mexico and Canada, respectively, will still be subjected to duties. Trump disregarded concerns regarding market volatility influencing his decision, stating, “Nothing to do with the market… long term, the United States will be very strong with what’s happening.”
In response, Ontario Premier Doug Ford downplayed the relief, saying, “A pause on some tariffs means nothing,” and US Treasury Secretary Scott Bessent took tensions further by calling Trudeau a ‘numbskull’ for considering suggested measures.
Economists warn that the tariffs could drive up consumer prices in the US and result in economic strains in Canada and Mexico. It has also been suggested this is a scheme to “make the rich richer” – seeing billionaires buying up stocks when prices fall, only to make good when the tariffs are eased and stock prices rise once more.
With billions in trade at stake daily and uncertainty lingering, businesses are struggling to adjust.
