President Donald Trump announced Thursday he will postpone 25% tariffs on goods from Mexico and Canada that comply with the United States-Mexico-Canada Agreement (USMCA) until April 2, marking a significant shift in his administration's trade policy.

The decision came after phone calls with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. The temporary reprieve applies to USMCA-compliant goods, which account for approximately 50% of Mexican imports and 36% of Canadian imports, according to White House officials [4].

'I did this as an accommodation, and out of respect for, President Sheinbaum,' Trump posted on Truth Social. 'Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl.' [1]

The pause does not apply to Canadian energy products, which will still face a 10% tariff. Additionally, non-USMCA compliant goods will remain subject to the full 25% tariff [3].

Despite the temporary relief, tensions remain high. Prime Minister Trudeau indicated he expects a prolonged trade dispute, stating that Canada's retaliatory measures will stay in place until U.S. tariffs are permanently removed [2]. Ontario Premier Doug Ford announced his province will proceed with implementing a 25% tariff on electricity exports to 1.5 million American homes in Minnesota, Michigan, and New York starting next week [4].

Financial markets responded cautiously to the news, with the Dow Jones Industrial Average remaining down approximately 400 points (0.9%) after the announcement. The broader S&P 500 fell 1.6%, while the tech-heavy Nasdaq dropped 2.2% [4].

The administration has indicated that a broader set of 'reciprocal' tariffs targeting multiple trading partners will still take effect on April 2, though specific details remain unclear [1].