American consumers received a temporary reprieve Thursday when President Donald Trump signed executive actions delaying tariffs on products from Mexico and Canada covered by the United States-Mexico-Canada Agreement until April 2.
“After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement,” Trump wrote on Truth Social. The president cited border security cooperation and fentanyl interdiction efforts as reasons for the delay.
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The postponement affects goods that would have faced a 25% tariff, sparing numerous everyday products from immediate price increases.
Automobiles were among the most significant items affected by the delay. According to the Cato Institute, new cars and trucks, which rely heavily on parts manufactured in Canada and Mexico, would likely have seen immediate price increases under the tariffs.
According to Newsweek, popular Mexican beers like Modelo and Corona also avoid immediate price hikes, as do avocados—90% of which come from Mexico. Building materials receive temporary relief as well, with about one-third of softwood lumber used in U.S. home construction coming from Canada.
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However, not all products are covered by the pause. A White House official told CNN that about 50% of imports from Mexico and 36% from Canada fall under the USMCA agreement. Energy imports from Canada, including crude oil that accounts for 61% of U.S. oil imports, remain subject to a 10% tariff, likely affecting gas prices, particularly in the Northeast.
The sudden policy shift represents a walkback of Trump’s trade agenda that had rattled markets. The S&P 500 had plunged 1.7% on Tuesday—its steepest one-day drop this year—when Trump insisted the tariffs would proceed.
The reprieve comes with caveats. The White House has made clear the delay is temporary, with tariffs potentially taking effect on April 2 unless further agreements are reached.
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Canadian Prime Minister Justin Trudeau said all of Canada’s retaliatory measures would remain in place. Ontario Premier Doug Ford confirmed to CNN that his province still plans to implement a 25% tariff on electricity exports to 1.5 million American homes in Minnesota, Michigan and New York next week.
While consumers have a one-month reprieve from potential price increases on many everyday items, CNN noted that businesses warn the uncertainty itself could create economic drag as companies hesitate to make investments amid unpredictable trade policy.
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