Following protracted last-minute negotiations with Mexico and Canada, President Donald Trump has declared a 30-day postponement of the heavy taxes he had threatened to apply on both countries. While Trump might declare triumph for obtaining concessions on border security and crime enforcement, Mexico’s President Claudia Sheinbaum and Canada’s Prime Minister Justin Trudeau have also made political gains. One of the main determinants of these conversations is the US-Mexico trade conflicts.
Now, at least temporarily, a possible trade war that might have rocked North America and beyond economically is under suspension. Still, the issue begs itself: who flinched first and what comes next while tensions remain?
How did Trump's approach work?
Trump’s high-stakes showdown with America’s closest trading allies seems to have paid off since Canada and Mexico have decided to tighten border security policies and fight fentanyl trafficking by more forceful actions.
Trump has advanced his “America First” agenda by using the power of the U.S. economy to negotiate concessions from other countries. This enables him to follow through on fundamental household concerns without instantly subjecting American consumers to the financial fallout from a full-scale trade war.
Trump’s negotiating tactic of tariffs is not novel. Mexico, Canada, and the European Union objected when he taxed steel and aluminum during his first administration. Economists counter that previous actions were somewhat small in scope when compared to his latest threats.
This time, Trump had promised to apply broad duties not only on Mexico and Canada but also on China, which still stands to be subject to a 10% tax increase on its goods beginning on Tuesday midnight. Once the 30-day period runs out, it is yet unknown whether Trump would carry out his threats directed toward Canada and Mexico. Businesses who are now reevaluating their reliance on the US-Mexico trade market, postponing manufacturing investments, and deferring worker hiring until the trade dispute is resolved have been driven by this uncertainty.
How has Canada handled the tariff pause?
Following Trump’s declaration of the 30-day tariff moratorium, Canadian politicians and business executives could be heard sighing collectively. Trudeau can claim a political triumph by arranging a brief truce in what would have become a catastrophic trade war, even while the danger of tariffs still hangs.
Politicians from Canada have been frantically trying to figure out what will meet Trump’s expectations. Domestic politics complicates this further as Trudeau approaches the end of his lame-duck prime minister term.
Although some of the planned border security actions on Monday seem novel, Canada has previously made major moves in this direction. The nation promised C$1.3 billion ($900 million; £700 million) in December to disrupt the fentanyl trade, equip law enforcement with new tools, and improve cooperation with US agencies.
Canada has also sent two Black Hawk aircraft and surveillance drones to guard the U.S.-Canada border. Officials have consistently highlighted these initiatives as proof that they give Trump’s worries on border security top priority.
The accord adds a noteworthy new component: a C$200 million intelligence directive meant to fight organized crime and fentanyl trafficking, along with a “fentanyl tsar”. Still, the long-term relationship between Canada and the United States begs different issues. Trump’s economic threats, especially within the US-Mexico trade framework, have severely rocked the cooperation between the two countries.
President Sheinbaum Navigated the Crisis?
Mexican President Claudia Sheinbaum remained cool throughout this trade crisis, advocating “calm” and “cool heads.” She was right even on Friday, expressing hope that a last-minute reprieve would be obtained. The accord was arrived upon following an early morning phone chat with President Trump.
Advocates of Sheinbaum have hailed her negotiating strategies as a master class in managing Trump. She managed to get important concessions from Trump even while she agreed to send National Guard troops to the border to concentrate on fentanyl smuggling.
Beyond the pivotal stop on tariffs, Sheinbaum obtained a promise from Trump that the United States would move more to stop the flow of highly powerful weapons from the country into Mexico—a matter that has long driven cartel bloodshed.
Sheinbaum also acquired time—something quite priceless. Having several weeks ahead, she now has the chance to confirm agreements from the phone call into long-term plans and make the interim tariff suspension permanent.
U.S. Secretary of State Marco Rubio is supposed to visit Mexico in the next days in order to go over these issues more. Additionally slated to be established is a combined task group on fentanyl with representatives from Mexican and American health and security agencies.
Having barely assumed office in October, Sheinbaum’s first major triumph of her new government will be the success in averting more trade conflicts. It might also define the tone of her next exchanges with President Trump and his team within the US-Mexico trade scene.
What Future Exists for North American Trade Relations?
Although the immediate prospect of a trade war has been avoided, the future of economic relations between the United States, Canada, and Mexico will depend critically on the next thirty days. Although the delay offers a brief respite, Trump’s future action is yet unknown.
Long term, will the additional pledges made by Canada and Mexico satisfy Trump? Under continuous trade conflicts, will companies keep making investments in North American markets? Most importantly, will the standoff intensify once more or will this stop result in a permanent fix?
All eyes will be on Washington, Ottawa, and Mexico City as the deadline draws near to observe how this high-stakes bargaining turns out.