Trump’s Trade Truce: Canada and Mexico Get a Pass, China Still in the Crosshairs

President Donald Trump announced a pause on upcoming 25% tariffs on Canada and Mexico for 30 days after both countries threatened to respond in kind.

Trump spoke with Canadian Prime Minister Justin Trudeau, who agreed to fortify the Canadian border in a bid to slow the flow of fentanyl into the U.S. Canada initially announced it would retaliate against Trump’s new tariffs with 25% levies on a raft of U.S. imports, including American beer, wine and bourbon, as well as fruits and fruit juices, including orange juice.

“This is a choice that, yes, will harm Canadians, but beyond that, it will have real consequences for you, the American people,” Trudeau said to American citizens. “As I have consistently said, tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities.”

A 25% tariff on Canadian imports would mean a massive hike in crude oil prices, beef, pork, grains, potatoes and canola oil.

Trudeau addressed the call on a post on Elon Musk’s X platform.

Trump also struck a deal with Mexican President Claudia Sheinbaum; in return for Mexico reinforcing the northern border with troops, the U.S. would limit the flow of guns into the country and hold off on any proposed tariffs for now.

However, the Trump administration isn’t backing down on its latest 10% tariffs on Chinese imports—and Beijing isn’t playing nice either.

In a brisk counterstrike, China has slapped retaliatory tariffs on a mix of American goods, hitting coal and liquefied natural gas with a 15% hike. In comparison, crude oil and agricultural machinery now face a 10% duty.

Steven Leung of Singapore-based brokerage UOB Kay Hian, said the move was entirely expected. “It’s just part of the game,” he told Reuters. “China is flexing its muscles to gain leverage before stepping into negotiations. But make no mistake, they’re still ready to talk.”