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Trump Delays Tariffs on Mexico and Canada

KEY POINTS

U.S. delays tariffs on Canada and Mexico for 30 days, China says it will take Trump to WTO.
Tariffs on China are set to take effect Tuesday at 12:01 AM ET.
More tariffs expected in mid-February.
Health systems use SRS tariff reports to gauge exposure.

By Lauren Palmer February 3, 2025

After President Trump’s tariffs on Canada, Mexico, and China rattled global markets, Mexico and Canada secured a 30-day delay through last-minute negotiations.

The U.S. has postponed the implementation of 25% tariffs on imports from Mexico and Canada, as well as 10% tariffs on Canadian energy products, for 30 days following last-minute negotiations on Monday. Tariffs on China are set to take effect Tuesday at 12:01 AM, with President Trump anticipating discussions with Chinese officials “probably over the next 24 hours.” The decision to pause tariffs on America’s neighbors came after Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau affirmed their commitments to strengthening border security with the U.S.

Canadian Prime Minister Justin Trudeau posted on X Monday afternoon, stating he had a “good call with President Trump” and reaffirming Canada’s $1.3 billion border plan. The initiative includes deploying 10,000 personnel, advanced technology, and helicopters to strengthen security. Trudeau also announced the appointment of a Fentanyl Czar, 24/7 border surveillance, a Canada-U.S. Joint Strike Force, and a $200 million intelligence directive to combat organized crime and fentanyl trafficking.

Mexican President Claudia Sheinbaum announced that Mexico will deploy 10,000 troops to its northern border to combat drug trafficking. In exchange, the U.S. has committed to curbing the flow of high-powered weapons into Mexico. Over the next month, officials from both nations will engage in trade discussions to finalize terms before the new tariff deadline in March.

Meanwhile, China vowed to challenge the tariffs at the World Trade Organization and take other “countermeasures” should the tariffs take effect, while also signaling a willingness to negotiate.

French President Emmanuel Macron and German Chancellor Olaf Scholz signaled that the EU is prepared to strike back if Trump follows through on his threats against European exports. “If Europe’s commercial interests are attacked, we will make ourselves respected and react accordingly,” Macron told reporters ahead of an emergency EU summit in Brussels. Chancellor Scholz echoed the sentiment, saying that while cooperation is preferable, Europe “will not stand idly by.”

Markets responded swiftly to the tariffs Trump proposed on Saturday, triggering a downturn across major indices. The Dow Jones Industrial Average dipped 50 points, the S&P 500 dropped 1.17%, and the Nasdaq Composite fell 2.10%. Asian and European markets saw sharp declines overnight, while the U.S. dollar surged against the Canadian dollar, Mexican peso, and Chinese yuan. U.S. West Texas Intermediate crude rose more than 3% in early trading, while gasoline futures climbed nearly 3%, adding to inflationary pressures. Canada and Mexico are the top two countries that export oil to the United States. In 2022, Canada supplied 52% of the U.S.’s total petroleum imports, and Mexico supplied 10%.

U.S. companies in key industries are preparing for stricter trade measures as Trump plans new tariffs on chips, pharmaceuticals, metals, and energy by mid-February. “That’ll happen fairly soon, around February 18,” he told reporters. The tariffs would build on existing duties, intensifying pressure on affected sectors. Emphasizing reshoring, Trump vowed to create a “tariff wall” to bring pharmaceutical production back to the U.S.

Meanwhile, healthcare executives are urgently assessing supply origins and exploring near-shore manufacturing. Key SRS reports are assisting health systems by mapping their purchased products, offering crucial insights into their supply chain footprint:

Products by Country (Tariff Risk) – choose any country to see which items you buy are manufactured there (in the Prevent dashboard)
“Products Subject to China Tariffs” – downloads current section 301 tariffs on healthcare item made in China (in the Prevent dashboard)
“Products Sites and Risks” – lists manufacturing location for all items you buy from the supplier (in the Prevent dashboard after you drill down on a supplier)
“Supplier Geopolitical Summary” – summarizes exposure for all countries (in the Respond dashboard)

If you have not yet tailored SRS to list manufacturing sites for the products you buy, it’s simple to do so if you have a subscription to SRS. Email support@supplyrisk.com for instructions.

For more information, see:

CNN, Trump says he agreed to pause tariffs on Mexico and Canada for one month, February 3

Associated Press, Trump agrees to pause tariffs on Canada and Mexico after they pledge to boost border enforcement, February 3

Daily Mail, Canada’s Justin Trudeau caves to Trump’s tariff threat and strikes billion-dollar border agreement, February 3

Manufacturing Dive, US delays tariffs on Mexico to M arch, February 3

Barron’s, Trump Says US-China Tariff Talks Likely In Next 24 Hours, February 3

NBC News, Markets sell off to start the week following Trump tariff announcements, February 3

The Tribune, Europe braces for Trump trade tariffs, as levies on Canada, Mexico, China roil markets, February 3

Fox 8, Wall Street drops as Trump’s tariffs hit markets worldwide; Dow down 550 points, February 3

Reuters, Trump launches trade war with tariffs on Mexico, Canada and China, February 2

CNN, Trump announces significant new tariffs on Mexico, Canada and China, sparking retaliatory actions, February 2

Supply Risk Solutions, U.S. to Impose Tariffs on Key Trading Partners Feb. 1, February 1