A decision has been made to delay tariffs on Mexican products until at least April 2, according to US President Donald Trump. This applies to all products listed in the USMCA (US-Mexico-Canada Agreement), a free trade agreement that replaced the 1994 NAFTA agreement in 2020. Later, it was also announced that Trump has extended the tariffs to a portion of Canadian imports.
The USMCA, which consists of 34 chapters, covers a wide range of topics, including automobiles, dairy products, wood and financial services. The agreement has led to the development of highly interconnected supply chains between the three participating countries, Mexico, the US and Canada, making it challenging to establish trade barriers.
Following a conversation with Mexican President Claudia Sheinbaum, Trump stated that he agreed that Mexico would not have to pay tariffs on anything under the USMCA agreement. Sheinbaum reported a “very good and respectful” phone call with Trump and expressed a willingness to cooperate in combating the trade of fentanyl.
US Trade Minister Howard Lutnick, in an interview with CNBC, explained that the temporary exception for vehicle parts could be extended to all products under the USMCA. However, there is no direct confirmation that the delay also applies to Canada, although negotiations are reportedly underway. The Premier of the Canadian province of Ontario has stated that the province will implement a 25% tariff on the electricity it delivers to New York, Michigan and Minnesota, regardless of the outcome of the negotiations.