Donald Trump pulled back from his trade war with Canada and Mexico on Thursday, temporarily delaying tariffs on many goods from the two countries once again.
Two days after imposing sweeping tariffs on all imports from his country’s closest trading partners, the US president announced that duties on a wide range of products would be shelved until April.
There are “no delays at all”, he told reporters in the Oval Office, signing an order that postponed the tariffs.
Trump has already softened the attack on Canada and Mexico, granting carmakers a one-month reprieve after they warned of widespread disruption. Top retail CEOs have also been bracing customers for significant price increases in grocery stores within days.
After a call with Claudia Sheinbaum, the Mexican president, Trump declared: “Mexico will not be required to pay Tariffs on anything” that falls under an existing trade deal between the US, Mexico and Canada known as USMCA.
Tariffs are not paid by countries, but importers – in this case, US companies – that buy products from businesses in the targeted countries.
Hours later, Trump signed an amendment which extended the same relief to Canada until 2 April. Earlier in the day he had pointedly attacked Justin Trudeau, his Canadian counterpart, claiming he was “using the Tariff problem” to stay in office.
Trump said the reversal has “nothing to do” with turbulence in the stock market in recent days, as investors weigh his economic plans. On Wall Street, the S&P 500 fell 1.8% on Thursday. “I’m not even looking at the market,” he claimed.
During the president’s joint address to Congress on Tuesday evening, he acknowledged that tariffs would cause disruption. There will be “a little disturbance, but we’re OK with that”, he said.
Trump had initially pledged to target Canada and Mexico with tariffs on his first day back in office. Upon his return, however, he said he was considering imposing the tariffs at the start of February. Last month, he offered Canada and Mexico a one-month delay at the 11th hour.
Only on Tuesday did he pull the trigger, imposing 25% duties all goods from Mexico, and 25% duties on most goods from Canada, with 10% duties on Canadian energy products. He also doubled a tariff on Chinese exports from 10% to 20%.
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Trump and his allies claim that higher tariffs on US imports from across the world will help “make America great again”, by enabling it to obtain political and economic concessions from allies and rivals on the global stage.
But businesses, both inside the US and worldwide, have warned of significant damage to companies and consumers if the Trump administration pushes ahead with this strategy.
The president has repeatedly vowed to reduce the US trade deficit – the gap between what it exports to the world and imports from it – which hit a record $131.4bn in January.
Trump blamed the trade deficit on Joe Biden, his predecessor, on social media: “I will change that!!!”
Source: theguardian.com
