Image Credit: Adobe Stock Images/MariusFaust.com
A couple days following a tax that had gone into effect on various goods coming in from Canada and Mexico, President Trump has decided to postpone several of his previously announced1 25% tariffs on these trading partners after a concern for economic consequences—reported AP2—as he signed executive orders making it official.
The tax on goods stem back to the threat posed by illegal aliens and drugs, including fentanyl, which the administration has said is being smuggled across Canadian and Mexican borders.
Trump commented yesterday that tariffs could be avoided by resolving the trade deficit, while stressing that at the moment, his most recent decision would not have an impact on the previously announced reciprocal tariffs2 that are planned to take effect by April 2.
When it comes to the specifics, imports arriving from Canada that follow the 2020 United States-Mexico-Canada Agreement (USMCA) would avoid the 25% tariffs for one month; meanwhile, potash arriving from Canada would be taxed 10%, the same amount that Trump previously stated would be used to tax Canadian energy resources. Despite these exemptions, an anonymous White House official that spoke with AP noted1 that about 62% of Canadian imports from Canada would still be subject to the new tariffs due to not being compliant with USMCA. The government of Canada did decide however to postpone additional retaliatory tariffs on US goods worth approximately $87 billion.
In a similar sense, those imports arriving from Mexico that follow USMCA would fall under the 25% tariff exclusion list for a month, according to the orders signed by Trump. Earlier this week, Mexico President Claudia Sheinbaum had announced that Mexico would enact a tariff on US products, with specifics on the included goods to set to be announced1 March 9, so whether those tariffs will be finalized is to be determined.
There was also no mention of if the tariff of 25% or higher on pharmaceuticals3 announced by Trump several weeks ago would be affected.
Stay tuned to Pharmaceutical Commerce for the latest updates.
References
1. Saraceno N. Tariffs on Canada and Mexico Now Official. Pharmaceutical Commerce. March 4, 2025. Accessed March 7, 2025. https://www.pharmaceuticalcommerce.com/view/tariffs-on-canada-and-mexico-now-official
2. Rugaber C, Boak J, Gillies R. Trump changes course and delays some tariffs on Mexico and Canada. AP. March 6, 2025. Accessed March 7, 2025. https://apnews.com/article/tariffs-trump-economy-mexico-canada-bfed103a11a2a71d8353350f94c78814
3. Saraceno N. Trump Reveals Plan to Enact 25% Tariff on Pharmaceuticals. Pharmaceutical Commerce. February 19, 2025. Accessed March 7, 2025. https://www.pharmaceuticalcommerce.com/view/trump-plan-25-percent-tariff-pharmaceuticals