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US President Donald Trump has said Mexico will not be required to pay tariffs on goods that come under the trade pact between the two countries and Canada until 2 April.
Trump has not confirmed if the suspension also applies to Canada, but its northern neighbour is expecting an exemption of the “same nature”, a Canadian government source told the BBC.
The latest move is the second climbdown in two days from Trump on his tariffs.
On Wednesday he said he would spare carmakers from 25% import taxes just a day after they came into effect.
Commerce Secretary Howard Lutnick told CNBC earlier on Thursday that the temporary exemption of tariffs for car part imports from Canada and Mexico could be extended to all products that are part of the United States-Mexico-Canada Agreement (USMCA).
Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement.
An exemption for Canada is expected to be announced later, despite Trump attacking Canadian Prime Minister Justin Trudeau on social media earlier on Thursday by saying he’s done a “terrible job” for Canada.
The USMCA came into force in 2020 after years of negotiations and revisions.
Goods worth billions cross the borders of the US, Canada, and Mexico each day and their economies are deeply integrated.
The introduction of tariffs has sparked a trade war between the US, its neighbours, and also China.
Tariffs are paid by the business importing a product or part.
Many US businesses have raised concerns about tariffs from America’s two closest trade partners, given the integrated supply chains.
In response to Trump’s initial 25% tariffs, Canada and Mexico also announced retaliatory import levies.
Earlier on Thursday, the Commerce Department revealed US imports spiked in January on the back of tariff fears.
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