Trump pauses 25% tariff on Mexico after border deal with President Claudia Sheinbaum

US President Donald Trump on Monday said that his administration has decided to pause plan to impose 25% tariffs on Mexico for one month, after Claudia Sheinbaum’s government agreed to deploy 10,000 Mexican troops to its border with the US.

“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. These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our Country. We further agreed to immediately pause the anticipated tariffs for a one month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico,” said Trump on Truth Social.

“I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a “deal” between our two Countries,” added Trump.

According to a Reuters report, Mexican President Sheinbaum confirmed on Monday that Trump has agreed to hold off imposing tariffs for one month.

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Sheinbaum said the deal was reached after she spoke on the phone to the US president.

“We have this month to work and convince each other that this is the best way forward,” Reuters quoted Sheinbaum as saying at a press conference.

Sheinbaum also said that the US has agreed to take action on preventing guns from flowing into her country.

Trump’s plan to impose a 25% tariff on imports from Canada and Mexico, along with an additional 10% tax on Chinese goods, was set to take effect on Tuesday. Canadian energy products would be subject to a lower 10% tariff.

The US president said the decision was driven by his concerns over illegal immigration and drug trafficking, which were key issues during his campaign.

Meanwhile, US stocks, which had dropped sharply on Monday morning on fears of a deepening trade war, pared their losses following the announcement. The benchmark S&P 500 was down 0.7% around 10:45 am ET (1545 GMT), cutting its losses on the day in half.

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The surprise announcement also relieved some of the pressure on Mexico’s peso.

Trump said on Monday he had spoken with Canadian Prime Minister Justin Trudeau and would do so again at 3 pm ET (2000 GMT).

The tariffs on Canada and China remain poised to take effect on Tuesday, and Canada has announced retaliatory tariffs.

A senior Canadian official told a New York Times reporter that Ottawa is not optimistic a similar reprieve is in the offing, the reporter said on X.

Speaking in Washington on Sunday after returning from his Mar-a-Lago estate, Trump indicated that the 27-nation European Union would be next in the firing line, but did not say when.

“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them,” he told reporters.

EU leaders meeting at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the US imposes tariffs, but also called for reason and negotiation.

Arriving at the talks, French President Emmanuel Macron said if the EU were attacked in its commercial interests it would have to “make itself respected and thus react”.

Chancellor Olaf Scholz of Germany said the bloc could respond if necessary with its own tariffs against the US, but stressed it was better for the two to find agreement on trade.

Trump hinted that Britain, which left the EU in 2020, might be spared tariffs, saying: “I think that one can be worked out”.

The US is the EU’s largest trade and investment partner. According to the Eurostat data from 2023, the United States had a deficit of 155.8 billion euros ($161.6 billion) with the EU in the trade of goods, offset by a surplus of 104 billion euros in services.

EU foreign policy chief Kaja Kallas said there were no winners in a trade war, and if one broke out between Europe and the United States, “then the one laughing on the side is China”.

With inputs from agencies