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President Donald Trump agreed to delay 25% tariffs against Mexico for one month after a conversation with his counterpart Claudia Sheinbaum on Monday, a dramatic turnabout with the neighboring nations on the brink of a trade war.
Markets rallied after Sheinbaum announced the delay and Trump confirmed it in a social media post, with the peso gaining as much as 1.3% against the dollar. The pair of leaders agreed that Mexico would send 10,000 National Guard officers to the border to help stem the flow of fentanyl and migration into the US, a key demand from Trump for it to avoid tariffs.
Trump told reporters on Monday he had a “great talk” with Sheinbaum and said he likes her “very much” but reaffirmed the tariff pause was temporary and would be contingent on Mexico taking steps to stop the flow of fentanyl and migrants to the US.
“We’ve agreed to talk and consider various other things. We haven’t agreed on tariffs yet, and maybe we will, maybe we won’t, but we have a very good relationship,” the president said in the Oval Office.
The delay with Mexico bolsters the view that Trump sees tariffs as a negotiating ploy but is still reluctant to inflict economic pain on Americans, while buying Sheinbaum time to show that she is a partner for the US rather than an adversary.
The two nations will continue negotiations over the tariffs over the next month, according to both leaders, with Sheinbaum saying at a Monday press conference that she and Trump agreed to speak frequently. As part of the deal, the US also pledged to work to prevent the trafficking of high-powered weapons into Mexico, she said at the press conference.
The talks will be “headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico,” Trump said in his social media post.
It remains unclear whether Canada, which is also facing the threat of 25% tariffs on most goods, will be able to reach a similar deal with Washington. Trump and Canadian Prime Minister Justin Trudeau spoke by phone Monday morning and are scheduled to hold another call in the afternoon. The US president said he pressed the Canadian leader about American banks’ ability to do business in its northern neighbor.