Trump pauses Mexico tariffs as last-ditch Canada talks continue

President Donald Trump announced a one-month pause on tariffs against Mexico after last-minute talks, but negotiations with Canada remain unresolved, raising fears of an escalating trade war.

The decision followed a “very friendly” conversation between Trump and Mexican President Claudia Sheinbaum, during which Mexico agreed to deploy 10,000 troops to the U.S. border to curb migration.

“During that time, there will be further talks as we attempt to achieve a ‘deal’ between our two countries,” Trump wrote on Truth Social.

While negotiations with Mexico made progress, talks with Canada stalled. Trump spoke with Prime Minister Justin Trudeau and planned another call on Monday, but the White House signaled frustration.

“This is not a trade war; this is a drug war,” National Economic Council Director Kevin Hassett told CNBC, claiming that opioids were “pouring” into the U.S. through both borders. However, U.S. government data shows most illicit drugs come from Mexico, not Canada.

Canada has vowed retaliation. Ontario, the country’s most populous province, banned U.S. firms from bidding on government contracts and canceled a deal with Musk’s Starlink.

“Ontario won’t do business with people hellbent on destroying our economy,” Ontario Premier Doug Ford posted on X.

Markets slide amid trade fears

Global markets tumbled as investors feared a widening trade war. Wall Street opened sharply lower, European markets fell, and the Mexican peso and Canadian dollar slumped against the U.S. dollar.

Despite economic uncertainty, Trump doubled down on tariffs as a negotiating tool.

“We may have short-term pain, and people understand that,” he said Sunday. “But long term, the United States has been ripped off by virtually every country in the world.”

The one-month pause gives negotiators time to resolve differences, but with Canada pushing back and economic concerns rising, the trade dispute is far from over.