US President Calls for Stricter Border Enforcement in Exchange for 30-Day Tariff Delay

MEXICO CITY/WASHINGTON/OTTAWA – US President Donald Trump announced on February 3 that he would temporarily suspend the imposition of significant tariffs on Mexico and Canada, agreeing to a 30-day pause. This decision comes in exchange for both countries agreeing to ramp up efforts on border security and tackling crime, specifically regarding drug smuggling and immigration issues.

However, tariffs on Chinese goods remain set to take effect, with a 10% duty on a wide range of imports scheduled for February 4.

Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau confirmed that they had agreed to strengthen enforcement measures at their respective borders. Mexico will deploy 10,000 National Guard troops to its northern border to combat illegal migration and the smuggling of drugs. Canada, on the other hand, pledged to deploy new technology and personnel to enhance border security and tackle organised crime, including efforts to curb fentanyl trafficking and money laundering.

In return, Trump promised to take action against the trafficking of high-powered firearms into Mexico, a point raised by Sheinbaum during discussions.

Trump expressed his satisfaction with the progress on social media, claiming the measures would help ensure the safety of all Americans. The agreements between the US, Mexico, and Canada have temporarily avoided the feared trade conflict, which economists had warned could harm all three economies and lead to increased consumer prices.

Following his conversations with the two leaders, Trump expressed a desire to negotiate further economic deals with his closest trading partners over the coming month. These two nations, which have become deeply interconnected with the US economy since the free-trade agreement signed in the 1990s, would benefit from avoiding the tariffs set to harm cross-border trade.

Tariffs on China Remain Unchanged
Unlike Mexico and Canada, no such agreements have been reached with China, as tariffs of 10% are still set to be implemented starting at 12:01 AM ET on February 4. Trump has not scheduled any discussions with Chinese President Xi Jinping until later in the week, and has signalled that tariffs could rise further if China does not curb the flow of fentanyl into the US.

China, however, has rejected the idea that fentanyl is solely America’s issue, and has suggested it would challenge the tariffs through the World Trade Organisation. Despite this, Beijing has kept the door open for potential negotiations.

This shift in focus has resulted in a boost to the Canadian dollar, which had recently hit its lowest level in over 20 years. US stock futures also rose after a day of losses on Wall Street.

Industry representatives, particularly from sectors reliant on cross-border trade, have expressed relief at the temporary pause. Chris Davison, head of a Canadian trade group representing canola producers, remarked that the news was encouraging, given the highly integrated nature of the US-Canada trade relationship.

Trump also hinted at the European Union (EU) potentially becoming his next target for tariffs, though he did not specify when this might occur. EU leaders, meeting informally in Brussels on February 3, signalled their readiness to respond to any such tariffs while emphasising the importance of negotiations.

Impact on Consumers and Economies
Trump acknowledged the short-term pain the tariffs could inflict on American consumers but justified them as necessary to curb immigration, narcotics trafficking, and to stimulate domestic industries. Analysts warn that the tariffs, if fully implemented, could cover nearly half of all US imports and would require an unrealistic increase in domestic manufacturing to fill the gap.

Other experts cautioned that the tariffs could push both Mexico and Canada into recession, potentially leading to stagflation in the US – a combination of high inflation, sluggish growth, and high unemployment.