President of the United States Donald Trump on Monday, February 3, announced his agreement to immediately pause tariffs on goods imported from Mexico, after, according to him, a very friendly conversation with the president of the mentioned country, Claudia Sheinbaum.
On the Truth Social media platform, Mr. Trump posted a message stating that he talked with the President of Mexico. According to him, during the mentioned communication, Claudia Sheinbaum agreed to immediately supply 10,000 Mexican soldiers to the border separating Mexico and the US. Donald Trump noted that these soldiers will be specifically designated to stop the flow of fentanyl and illegal migrants to the United States.
The message published in Truth Social also contains information that an agreement has been reached on an immediate pause in tariffs on goods imported from Mexico for one month. Donald Trump said that during the mentioned period, negotiations will be held headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and high-level representatives of Mexico. Moreover, Mr. Trump noted that he was looking forward to participating in negotiations with Claudia Sheinbaum, and underlined that Washington and Mexico City attempt to achieve a deal.
Trade measures in the form of 25% tariffs on goods imported from Mexico were due to take effect at midnight. It’s worth mentioning that last week, Donald Trump also announced levies on products shipped from Canada and China.
On Monday, Mr. Trump said he had his first telephone conversation with Canadian Prime Minister Justin Trudeau. Another conversation between these politicians will also take place on February 3. The 25% tariffs on goods imported from Canada are scheduled to take effect at midnight.
It is worth noting separately that some Republican senators posted messages on the social media platform X in which they expressed their disagreement with the tightening of the United States trade policy. In the relevant context, special attention was paid to tariffs on goods imported from Canada.
Senator Susan Collins of Maine, who has repeatedly made public critical remarks about Donald Trump, said that her region’s economy is integrated with the country, which is the northern neighbor of the United States. Also, in the relevant context, it was noted that Canada is the most important trading partner of Maine.
Susan Collins stated that certain tariffs will place a significant burden on many families, manufacturers, the forest products industry, small businesses, lobstermen, and agricultural producers. The senator also noted that she is interacting with Donald Trump administration officials to help them better understand the potential consequences of certain trade tightening measures for Maine and learn more about the application of relevant solutions, the scope, duration, and other important information, including any exceptions that may be provided for the northern border states, certain industries, agricultural producers and others who rely on economic partnership with Canada.
Senator Chuck Grassley of Iowa said that farmers in this region get most of their potash, the main ingredient of fertilizers, from Canadian manufacturers. He also noted that inflation, which grew significantly during the administration of former United States President Joe Biden, increased the input cost for farming by 20%. In this context, there was a separate underlying rise in fertilizer prices. Chuck Grassley pleaded with Donald Trump to exclude potash from the tariff because family farmers get most of the relevant products from Canada.
Senator Rand Paul of Kentucky also did not support the tightening of tariff policy. In this context, he stated that tariffs are simply taxes. Moreover, Rand Paul noted that conservatives once united against new taxes. According to him, taxation of trade will mean less trade and higher prices.
Amid news of a pause in tariffs on goods imported from Mexico, stocks were on the verge of a comeback after initially falling on Monday. The Dow declined by about 130 points. The initial drop in this indicator at the opening bell was almost 600 points. The S&P 500 declined 0.7%. The Nasdaq Composite dropped 1%. It is worth noting that both mentioned indicators have significantly moved away from their lows.
Bitcoin and other cryptocurrencies also reversed course and broadly grew.
Moreover, shares of car manufacturers were on the recovery trajectory. It is worth noting that in the economic aspect, the relevant companies are particularly vulnerable to the tightening of trade policy. This is because almost all US-brand cars are manufactured, at least partially, in Mexico or Canada. The value of GM shares fell by less than 2%. Initially, the decrease in this indicator was more than 7%. The value of shares of Jeep and Chrysler maker Stellantis declined by 3%. Ford’s securities fell by more than 1%.
Major European indexes were down across the board amid Washington’s tightening trade policy. Asian markets closed with a sharp decline. At the same time, the US dollar showed rapid growth.
As we have reported earlier, JPMorgan Chase CEO Says About Positive Effect of Donald Trump’s Tariff Policy.
