Tariff Updates: USMCA Exemptions for Mexico and Canada Until April 2

Tariffs against Canada, Mexico, and China took effect Tuesday, garnering retaliatory tariffs and threatening Canada's economy. President Donald Trump just announced that Mexico and Canada will not have to pay tariffs on goods that fall under the USMCA agreement until April.

Trump-Trudeau Phone Call: On Wednesday, Trump told Canadian Prime Minister Justin Trudeau he had not done enough to combat fentanyl smuggling for Trump to lift the 25% tariff on Canadian imports, and neither had Mexico. US Commerce Secretary Howard Lutnick said that the administration was looking to meet Canada and Mexico “in the middle.” Trudeau's office said communication between the two countries will continue. 

Auto Exemption: After speaking with leaders of Ford, General Motors, and Stellantis Wednesday, Trump announced a one-month exemption on tariff imports from Canada and Mexico for US auto manufacturers. White House press secretary Karoline Leavitt said Trump was blunt with the companies, “He told them that they should get on it, start investing, start moving, shift production here to the United States of America where they will pay no tariff.” 

USMCA Exemptions: Trump said, “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA Agreement. This Agreement is until April 2nd.” The USMCA trade deal was negotiated during Trump's first term as president as a replacement for the North American Free Trade Agreement (NAFTA). Lutnick said his “off the cuff” estimate was that over 50% of imports from Canada and Mexico were compliant with the USMCA. Canada was also included on the exemption, covering about 37% of the nation's imported goods. 

How The Media Covered It: Outlets on the left tended to focus on the negative effects tariffs could have on the cost of goods and the stock market, while the right included criticism and praise for the moves.