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Just hours before sweeping US tariffs on Mexico were set to take effect, a last-minute phone call between Donald Trump and Mexican President Claudia Sheinbaum resulted in a one-month delay in the implementation of the 25 per cent tariffs.
During a press conference in Mexico City, Sheinbaum announced that she had agreed to deploy 10,000 National Guard troops to the northern border in an effort to combat drug trafficking, leading to the postponement of the tariffs. She described the conversation with Trump as productive and emphasized the importance of collaboration and sovereignty.
Trump confirmed the temporary halt in tariffs and expressed his anticipation for negotiations between high-level officials from both countries on trade and security matters.
Following news of the agreement, the Mexican peso and Canadian dollar both saw positive movement in the currency markets, while US stocks also recovered from earlier losses.
The last-minute decision to delay the tariffs left analysts puzzled, with one remarking that he was glad no trades were made based on the uncertainty.
Sheinbaum’s announcement of the conversation with Trump was met with applause from reporters, signaling a positive step towards resolving the trade dispute.
Trump’s decision to postpone the tariffs on Mexico and Canada averted a potential trade war that had unsettled global markets. The president’s insistence on using tariffs as leverage to address border issues faced criticism from US companies concerned about price increases and supply chain disruptions.
While Trump’s call with Sheinbaum yielded positive outcomes, his conversation with Canadian Prime Minister Justin Trudeau did not lead to a similar agreement on tariffs. Sheinbaum highlighted Mexico’s concerns about arms trafficking from the US, which Trump pledged to address, emphasizing the importance of cooperation between the two nations.