On 6 March 2025, US president Donald Trump announces adjustments to the tariffs imposed on imports to the US from Canada and Mexico, in order to ‘minimise disruption to the automotive industry’.
A 25% tariff on the US’ northern and southern neighbours came into effect just three days earlier, after the 30-day pause period on the tariffs announced at the beginning of February came to an end.
A White House fact sheet on 3 March confirmed that Trump would be proceeding with these tariffs to ‘combat the extraordinary threat to US national security’ posed by ‘unchecked drug trafficking’.
It claimed that ‘while president Trump gave both Canada and Mexico ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into [the US], they have failed to adequately address the situation’.
Canadian prime minister Justin Trudeau issued a statement following this, in which he denounced the tariffs: “Today, after a 30-day pause, the United States administration has decided to proceed with imposing 25% tariffs on Canadian exports and 10% tariffs on Canadian energy. Let me be unequivocally clear – there is no justification for these actions.”
He went on to threaten reciprocal tariffs: “Canada will not let this unjustified decision go unanswered. Should American tariffs come into effect tonight, Canada will, effective 12:01am EST tomorrow, respond with 25% tariffs against $155 billion of American goods – starting with tariffs on $30bn worth of goods immediately, and tariffs on the remaining $125bn on American products in 21 days’ time.
“Our tariffs will remain in place until the US trade action is withdrawn, and should US tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures.”
Meanwhile, Mexican president Claudia Sheinbaum claimed that the country would respond to the US with retaliatory tariffs, but that the Mexican government would wait until she’d spoken to Trump.
She was quoted as saying: “There is no motive or reason, nor justification that supports this decision that will affect our people and our nations.”
Then on 6 March, via another fact sheet, the White House confirmed that the tariffs on Canada and Mexico had been adjusted ‘in recognition of the structure of the automotive supply chain that strives to bring production into America’.
The fact sheet outlined Trump’s belief that while ‘appropriate action’ from the governments of Canada and Mexico is still required, the US automotive industry ‘should not suffer significant disruption just because of the structure of its supply chain’.
According to the Bureau of Labor Statistics (BLS), the automotive industry employs over 4.3 million people as of 2024, equating to approximately 1.3% of the US population.
The updated duties are now as follows: 25% tariffs on goods that do not satisfy US-Mexico-Canada Agreement (USMCA) rules of origin; a lower 10% tariff on those energy products imported from Canada that fall outside the USMCA preference; a lower 10% tariff on any potash imported from Canada and Mexico that falls outside the USMCA preference; and no tariffs on those goods from Canada and Mexico that claim and qualify for USMCA preference.
Responding in a post on social media platform X on 6 March, Canada’s minister of finance and intergovernmental affairs Dominic LeBlanc wrote: “The United States has agreed to suspend tariffs on CUSMA-compliant exports from Canada until 2 April. As a result, Canada will not proceed with the second wave of tariffs on $125bn of US products until 2 April, while we continue to work for the removal of all tariffs.”
Mexico’s Sheinbaum also took to Twitter in the wake of the announcement, thanking Trump, describing “an excellent and respectful call” between the two leaders, and referring to the result of this call as “a very good agreement”.
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