Trump says he agreed to pause tariffs on Mexico and Canada for one month

 Trump says he agreed to temporarily suspend tariffs on Mexico and Canada for one month President Donald Trump announced Friday that he was pausing his tariffs on imports from Mexico and Canada after holding phone calls on Monday with each country's leadership — hours ahead of the imposition of the vast actions.

The proposed tariffs Trump said Saturday include a 25% duty on all imports from Mexico and most from Canada-that is until there was that carve-out to apply a 10% tariff on energy products and a brand-new 10% tariff on Chinese goods. Trump said in an earlier, separate appearance, that he would soon be speaking to China.

READ MORE: Trump agrees to postpone Canada and Mexico tariffs

Trump agreed to freeze the tariffs on America's neighbors after Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau made commitments, some of which they had already made, to strengthen security at their respective borders with the United States.

"I just spoke with President Claudia Sheinbaum of Mexico. It was a very friendly conversation wherein she agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States," Trump wrote on Truth Social earlier Monday.

"These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our country," he wrote.

He took to Truth Social with a similar announcement later in the day, after Trudeau first announced the 30-day pause.

"Canada has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of Americans, while destroying their families and communities all across our Country," Trump posted. (As CNN has reported, Canada makes up just 0.2% of border fentanyl seizures.)

All this after talking to Trump, Truene said he would implement his border plan announced earlier for $1.3 billion commit to appointing a "fentanyl czar, and add cartels to the list of terrorists".

The extraordinary tariff announcement over the weekend against America's three largest trading partners had raised alarm even among some corners of Trump's own party and sent shockwaves through the North American economy, rattling businesses and the markets and delivering uncertainty to consumers who are still reeling from years of high inflation.

And Trump's tariff promises did unleash a trade war. Retaliatory tariffs were ordered by Canada, and China vowed to "take necessary countermeasures." The executive orders put into motion by Trump included a retaliation clause that said America could launch even steeper tariffs and raise costs even further. The president has also talked about another round of tariffs later this month, perhaps on other countries.

But even Trump, a lifelong advocate of tariffs, acknowledged Sunday what economists, members of Congress, and even some of his own aides once upon a time have warned: Americans may end up paying the cost of the new tariffs.

Economists have estimated that the North American tariffs if they arise, would send the Canadian and Mexican economies hurtling into recession and probably lift consumer prices on cars, gasoline, lumber, and other imports for Americans.

The Dow had fallen nearly 600 points to open, but news of a deal with Mexico sent stocks toward a comeback.

Trump dismissed the market reaction Monday, telling Oval Office reporters that he wasn't even aware it was tumultuous. "I don't know. I don't think about it," he said.

The Wall Street Journal had ripped the Trump tariffs to shreds in a Sunday editorial titled: "The dumbest trade war in history.".

When asked the about market reaction — and the Wall Street Journal’s editorial — Trump demurred on Monday when signing executive actions in the Oval Office.

“Not only is it not dumb, you’re going to see, you’re going to see every single one of those countries is dying to make a deal,” he said, sitting feet away from Rupert Murdoch, whose newspaper empire includes the Journal.

Iowa GOP Sen. Chuck Grassley, urging Trump to carve out an exemption for potash because of the potential impact to Iowa family farmers, whom he said get most of the fertilizer from Canada, applauded the pause in the tariffs on Mexico.

"Good news on Mexico tariff pause for 1 month," Grassley posted on X Monday. "Hopefully negotiating will preempt more talk of tariffs."

Main State Sen. Susan Collins, a Republican and vocal Trump critic, had also sounded the alarm about tariffs on Canada, which she said on X is "our state's most important trading partner."

"It would hurt Mainers, it would hurt Americans," McConnell said in an interview aired Sunday on CBS' "60 Minutes.".

It will drive the cost of everything up. In other words, it will be paid for by American consumers, the Kentucky senator said. I mean, why would you want to get in a fight with your allies over this?

Mexico, and the US holding high-level talks on security, migration

Trump said on Monday he looked forward to participating in negotiations with Mexico.

We agreed further that we will immediately suspend the planned tariffs for a one-month period during which we shall engage in negotiations led by our Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico," he wrote. "I look forward to taking part in those negotiations, with President Sheinbaum, as we try to reach a 'deal' between our two Countries.

According to Sheinbaum, who addresses the morning press conference, 10,000 National Guard troops will be mobilized on its northern border. The aim here is to augment the reduction in fentanyl flow into the United States, shore up the reinforcement of the border, and contribute to the strengthening of its national territory.

"For humanitarian reasons, we must help the United States address its fentanyl consumption crisis, which is leading to overdose deaths," she said at her morning press conference Monday.

Sheinbaum also noted that the US, for the first time, has agreed to work together to prevent high-powered weapons from entering Mexico.

"I believe this is a very important aspect of the agreement we reached," she said.

High-level talks on security, migration, and trade will continue between officials from the US and Mexico, Sheinbaum said, following an agreement to halt tariffs for a month.

Sheinbaum also explained to Trump that she disagreed with his claim that the Mexican government is in bed with cartels.

"There is no way we would come to an agreement under those circumstances," she said.

Underscoring economic uncertainty

Tariffs — and the mere threat of them — served as go-to policy moves for Trump in his first term and were expected to be key pillars in his second.

“The president has used tariffs as a leverage tool,” Brett Ryan, senior US economist at Deutsche Bank, told CNN on Monday. “Eventually you’re going to have to implement them or else your threats become meaningless.”

READ MORE: Trump and leaders of Canada and Mexico say tariffs will be

"I think businesses have already been preparing to the extent that they can," Ryan said. "The threat obviously doesn't go away, and it's still out there. At some point, you are going to get tariff actions."

At the very least, the agreement injects further unpredictability into the US economy.

“What we’re seeing this morning does really highlight that there’s a lot of uncertainty about how policies unfold,” Boston Federal Reserve President Susan Collins said in a CNBC interview Monday morning following the announcements from Sheinbaum and Trump.

It is just really not possible to be too precise about what the likely impacts are going to be, without knowing what actual policy will be implemented," added Collins, who is voting on interest rate decisions this year.

The broad-based tariffs placed by Trump on Mexico, Canada, and China are considered extremely rare, making it complicated for central bank economists to quantify the potential economic implications.

For now, Collins said her expectation is that any new tariffs will drive the prices of goods up, but she's not convinced that it will necessarily mean higher inflation levels.