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US President Donald Trump halted sweeping tariffs on Mexico and Canada just hours before they were due to come into force, pulling North America back from the brink of a damaging trade war.
Deals to delay sweeping tariffs on America’s two biggest trading partners by a month were announced on Monday following separate bilateral calls between Trump and Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.
Trump’s move to back away from the levies for now marks a reversal from the weekend, when he unnerved allies and investors by saying he would follow through on his plans to hit Canada and Mexico with huge levies.
Sheinbaum and Trudeau both agreed to place 10,000 troops at their borders with the US and combat drug trafficking, winning them a 30-day reprieve from levies that would have disrupted hundreds of billions of dollars a year in trade and potentially ignited a tit-for-tat skirmish.
As part of the package of border measures, Trudeau vowed to provide C$200mn ($138.56mn) of funding tied to “organised crime and fentanyl” and appointing a “Fentanyl Czar”.
Canada will also list cartels as terrorist organisations and launch a “Canada- US Joint Strike Force to combat organised crime, fentanyl and money laundering”.
“The Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final economic deal with Canada can be structured,” Trump said late on Monday on his Truth Social platform, having hours earlier indicated that he would hold a month of “negotiations” with Mexico.
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