Mexican and Canadian Import Tariffs Postponed Amid Economic Fallout

If you blinked in the last few days, you probably missed some important developments around U.S. President Donald Trump’s proposed tariffs on imports.

On Saturday, Trump announced that a 25% tariff on most goods from Mexico and Canada, as well as a 10% tariff on Chinese imports, would begin at midnight on Tuesday, February 4. Canada, Mexico and China are America’s three largest trading partners, accounting for more than a third of U.S. imports, including cars, pharmaceuticals, lumber, electronics, and steel. On Saturday, Trump also threatened to begin taxing imports from the European Union later this month.

The ink was barely dry on the controversial new executive orders — which are protected by the International Emergency Economic Powers Act — when some big reactions began.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum threatened to add new tariffs on U.S. imports into their own countries, boycott American products, or pursue both strategies. China challenged the legality of the tariffs with the World Trade Organization and promised vague “countermeasures” in response. A top official from the Fed predicted that the costs associated with new tariffs would be passed directly to U.S. consumers. Perhaps most important, financial markets tumbled sharply as trading opened on Monday.

By 10:30 am on Monday morning, Trump and Sheinbaum had reached an agreement to pause the Mexican tariffs for a month. The agreement was based on Sheinbaum’s pledge to send 10,000 National Guard troops to the U.S.-Mexico border to prevent drug trafficking, as well as Trump’s pledge to reduce the flow of high-power weapons into Mexico. Financial markets quickly began to rebound following the news.

Following two meetings between Trump and Trudeau on Monday, the leaders also reached an agreement to postpone the proposed tariffs for 30 days. The announcement came around 5:00 pm.

Watch, Wait, and Strategize with Redwood

Amid this flurry of activity, what should U.S. importers and exporters be doing? The most important action you can take is partnering with a full-service, modern 4PL like Redwood to prepare for a range of future scenarios.

Redwood experts — including our dedicated cross-border team at Redwood Mexico — can help you identify new suppliers, new routes, new markets, and new network models to minimize your financial impacts from any new trade policies. Based on a total-landed-cost analysis, Redwood can help your organization pivot swiftly, strategically, and profitably as the global trade landscape continues to shift. During the last Trump presidency, Redwood helped customers act to reduce the impact of import tariffs — and we can do the same for your business in 2025.

We’ll continue to update you on new developments around tariffs and trade. But in the meantime, why not reach out to Redwood to prepare for what’s next?