Donald Trump has revealed significant news regarding Mexico’s tariffs just hours before the deadline.
Since April 2, when Trump declared America would commemorate ‘Liberation Day’ due to its aggressive reciprocal tariffs plan against trading partners, the US president has maintained a firm stance in trade negotiations.
While Trump has postponed deadlines for some countries and reached agreements with others, including the UK, Japan, and the European Union, he set August 1 as the cutoff for all negotiations. If talks were not finalized by this date, countries would face his stringent tariff policies.
Countries such as Australia, India, Canada, and Mexico had not negotiated a deal with the US by July 31. Trump threatened to impose a global baseline tariff of approximately 15 to 20 percent on these nations, higher than the 10 percent he initially proposed in April.
Earlier this month, Trump also threatened a 30 percent tariff on Mexican goods.
However, Mexico appears to have temporarily avoided this high tax rate as Trump announced a new 90-day negotiation period with the country.
Trump posted on his Truth Social platform that his conversation with Mexican leader Claudia Sheinbaum was ‘very successful’ in fostering mutual understanding.
“We avoided the tariff increase announced for tomorrow and we got 90 days to build a long-term agreement through dialogue,” the Mexican president shared on Twitter.
Despite this reprieve, Mexico is not completely in the clear, as 25 percent tariffs remain in effect.
“The complexities of a Deal with Mexico are somewhat different than other Nations because of both the problems, and assets, of the Border,” Trump explained. He added that goods entering the US from Mexico would still face a 25 percent tariff, linked to alleged drug trafficking he termed a ’25 percent Fentanyl tariff.’
“We have agreed to extend, for a 90 Day period, the exact same deal as we had for the last short period of time,” he continued, which includes a 25 percent tariff on cars while copper, aluminum, and steel would be taxed at 50 percent.
“Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many. We will be talking to Mexico over the next 90 Days with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer.
“There will be continued cooperation on the Border as it relates to all aspects of Security, including Drugs, Drug Distribution, and Illegal Immigration into the United States. Thank you for your attention to this matter!” he concluded.
Some goods remain shielded from Trump’s tariffs by the 2020 US-Mexico-Canada Agreement (USMCA), which he negotiated during his first term, although it is set for renegotiation next year.
Meanwhile, India is preparing for a 25 percent tariff and an additional unspecified ‘penalty’ due to what Trump perceives as unfair trade practices and the country’s procurement of military hardware and energy from Russia.
Canada is also poised to face 35 percent tariffs on several goods as of tomorrow, with the potential for higher rates if the country responds with its own measures.
Regarding Australia, which maintains a trade deficit with the US, it seems the initial 10 percent tariffs might apply, or possibly the newly revised higher baseline of 15 to 20 percent.