President Donald Trump has issued new orders that greatly widen the range of goods excluded from his recently implemented tariffs on imports from Canada and Mexico.
This development represents Trump’s second retreat in as many days regarding import taxes on America’s two largest trading partners—policies that have stirred uncertainty among businesses and alarmed financial markets.
Just one day after the tariffs took effect, Trump announced a temporary exemption for automakers from the 25% import duty.
Claudia Sheinbaum, Mexican President expressed gratitude for the decision, while Canadian Prime Minister Justin Trudeau warned that a trade conflict between the two allies might persist in the near term, even with these targeted concessions.
The exemption applies to merchandise transported under North America’s free trade pact—the US-Mexico-Canada Agreement (USMCA)—an accord Trump originally signed during his first term. A White House official noted that roughly 50% of U.S. imports from Mexico and 38% from Canada are shipped under the guidelines of that deal.
By signing the orders, Trump rejected assertions that the rollback was driven by concerns over the stock market. Indeed, Thursday afternoon saw all major U.S. stock indices decline, with the S&P 500—which monitors 500 of the largest U.S. companies—dropping almost 1.8%.
The White House has maintained its commitment to the tariff strategy, vowing to act on April 2. Officials have indicated that they will reveal recommendations for customized, “reciprocal” trade duties applicable to various countries globally.
Following a telephone conversation with Sheinbaum, Trump confirmed that the exemptions would remain in place until April 2. On Thursday, Sheinbaum described her conversation with Trump as an “excellent and respectful” exchange, noting that both nations would collaborate to reduce the smuggling of fentanyl from Mexico to the U.S. and to limit the cross-border trafficking of firearms.
Trump also held a call with Trudeau, who characterized the discussion as heated, but “substantive”, and indicated that dialogue with Trump administration officials was continuing. In his remarks, he stated, “Our goal remains to get these tariffs, all tariffs removed.”
Even before the relief became official—though it appeared imminent—Ontario Premier Doug Ford, head of the nation’s most populous province, told CNN that his province intended to maintain a 25% tariff on electricity supplied to 1.5 million homes and businesses in New York, Michigan, and Minnesota starting Monday.
“… Honestly, it really bothers me. We have to do this, but I don’t want to do this,” he said.
Every day, billions of dollars in goods traverse the borders between the U.S., Canada, and Mexico—a testament to decades of deep economic integration fostered by free trade.
Trump contends that implementing tariffs will safeguard American industry and stimulate manufacturing. In contrast, numerous economists warn that tariffs may drive up prices for U.S. consumers and could even trigger significant economic downturns in Mexico and Canada.
The U.S. economy is beginning to reveal the impacts of disruptions caused by Trump’s policies. According to the Commerce Department, import volumes surged in January amid fears over tariffs, and America’s trade deficit grew by 34% to exceed $130 billion (£100 billion).
Gregory Brown, head of BenLee—a manufacturer of large trailers—stated that he had been forced to adjust prices repeatedly over the past five weeks due to Trump’s policies, including an order slated to expand tariffs on steel and aluminum later this month. Nevertheless, Brown, who attended a speech by Treasury Secretary Scott Bessent at the Economic Club of New York, observed that his customers are currently accepting the higher costs, suggesting resilience in the economy.
He remarked, “It’s a great growth economy,” adding that the economic strength had persisted under Biden as well. He viewed Trump’s rapid move to ease the new tariffs as evidence of a business-friendly president adapting to the “business reality”.
However, some remain concerned that such back-and-forth policy shifts could inflict economic harm. One investment manager warned, “I think we’re going to have a recession before whatever succeeds in the future,” adding, “You’re going to get the bad before you get the good.”
