Trump pauses some of the tariffs against Mexico and Canada

Trump loves to use tariffs to create a position of strength when negotiating with other countries.

In February, Trump announced he was going to hit Mexico and Canada with tariffs, but when the time came to drop the hammer, Trump backed off a bit, giving them both another month.

Tariffs Announced

On February 1, 2025, Trump announced 25% tariffs on Mexico and Canada that would kick in on March 1, 2025, if they did not meet his border demands.

The announcement created a bit of a panic in the market as well as within the consumer goods industry, as some vendors started to raise prices immediately in anticipation of the tariffs.

For Mexico, the key issue was helping to curb traffic at the border. For Canada, Trump wanted more help along the northern border to stop the flow of fentanyl into this country.

Toward the end of February, Donald Trump stated that neither country had performed to his liking, so the tariffs were going into effect.

Pushback

While both countries pushed back on the tariffs, it was Prime Minister Trudeau from Canada who seemed to be trying to revitalize his political career by pushing back against Trump.

Trudeau announced that Canada would place reciprocal tariffs on all US products if Trump followed through with his threat, which drew a response from Trump, who stated, "Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!"

Trudeau also stated that Trump was planning "a total collapse of the Canadian economy because that will make it easier to annex us.”

All of Canada’s leadership on both sides of the aisle have stated that becoming a part of the United States is not an option, and I think Trump is silly for continuing to push this. As I noted in a very detailed report earlier this week, it makes no sense to try to absorb an uber-liberal country, which would significantly swing the balance of power to Democrats if Canada became a state. Nobody advocating for this in the Trump camp has even addressed that issue.

Trump Backs Off

Trump has now decided to push the deadline for Canada and Mexico to meet his demands back another month, announcing on Thursday that he signed an order to extend the deadline to April 1.

Many believe a crashing market inspired the move, but Trump insisted that was not the case, stating, “I’m not even looking at the market." Rest assured, that is a lie because Trump is obsessed with the stock market as president.

He added, “A lot of them are globalist … companies that won’t be doing as well because we’re taking back things that have been taken from us years ago. We’ve been treated very unfairly.” That seems to be Trump’s go-to line when something is not working out in his favor, as he has used it repeatedly.

I have zero issue with Trump using the tariffs for leverage, as I have seen this move before, and it has generally worked out very well for him. Unfortunately, we have seen many vendors panicking, already increasing prices even though the tariffs have yet to take place, meaning they are excessively pricing goods they already have in stock even though they were not taxed. This process will hurt a bit on the front end, but I think it will eventually level off and have a positive impact. I am going on past record saying that, so I am going to give Trump a little leeway here.