From The Texas Tribune:
WASHINGTON — Presidents Donald Trump and Claudia Sheinbaum of Mexico will delay tariffs on each other’s countries for one month in exchange for added military personnel on the U.S.-Mexico border, the two heads of state announced on social media Monday.
Trump imposed 25% tariffs on Mexico and Canada and 10% tariffs on China over the weekend, prompting retaliatory tariffs from the countries that shook economists and Texas’ business community. Mexico is Texas’ biggest trading partner by a wide margin, followed by Canada and China. Trump asserted the tariffs were to compel Mexico and Canada into tamping down illegal border crossings.
Trump said he would pause the tariffs in exchange for Mexico sending 10,000 soldiers to the border “specifically designated to stop the flow of fentanyl, and illegal migrants into our Country.” Sheinbaum said the U.S. also committed to working toward ending arms trafficking into Mexico, a long-time priority for the Mexican government.
During the pause, Trump’s Secretary of State Marco Rubio and his pick for Secretary of Commerce, Howard Lutnick, will negotiate with their Mexican counterparts to find a lasting trade and security agreement. The U.S. Senate has not yet confirmed Lutnick’s nomination. He faces a vote in the Senate Commerce Committee on Wednesday.
“I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a “deal” between our two Countries,” Trump posted on social media.
Texas is the biggest exporting state in the country, sending over $129 billion in goods to Mexico in 2023. Even many of Trump’s supporters in Texas, who praised him for his tax cuts and freer regulatory agenda, warned that tariffs would be punishing on the state’s economy. Tariffs typically increase inflation as importers increase prices for consumers to make up for lost profits.
The globalized nature of the supply chain means goods often cross borders multiple times before they reach their final consumers, potentially increasing tariffs even further.
Trump did not say anything Monday about changing his tariffs on Canada or China, but said on social media that he would be speaking with Prime Minister Justin Trudeau of Canada this afternoon.
Trump imposed the tariffs under the International Emergency Economic Powers Act, a 1977 law that allows the president to directly impose tariffs in the event of an “unusual and extraordinary threat.” Trump declared during his inauguration speechthat border crossings constitute a national emergency.
