Donald Trump has confirmed the US will delay the imposition of hefty tariffs on goods from Mexico after shockwaves were sent through Dow Jones this week.
The 47th President, who sent markets tumbling after announcing the 20 per cent levy, announced tariffs were being pushed back after a phone call with his Mexican counterpart Claudia Sheinbaum.
In a post on Truth Social, Trump said: "After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement.
"This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum.
"Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!"
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Trump's plan of new tariffs have sent shockwaves through the stock marketsGETTY Despite this U-turn, the Trump administration has yet to rollback on the sweeping tariffs imposed on Canada, as well as the extra 10 per cent tax on imports from China.
However, Trump has agreed to reward the US auto sector a one-month exemption from the levies the CEOs of America’s “Big Three” carmakers called for some reprieve.
Market analysts are expecting other sectors to be included under the exemption in the near future.
The United States–Mexico–Canada Agreement (USMCA) was signed by Trump, Canadian Prime Minister Justin Trudeau and the Mexican Government in 2018.
Despite signing the deal during his previous administration, the US President has been critical of the trade agreement between the North American countries.
Earlier today, Commerce Secretary Howard Lutnick told CNBC earlier that Trump was considering exemptions on Canadian and Mexican goods covered by the agreement.
The one-month delay on auto manufacturers is only applicable if those vehicles comply with the USMCA trade deal.
Trudeau has claimed his goal is to "get all tariffs removed" with his Government having "discussions" about a second wave of retaliatory tariffs against the US.
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The stock market has been in turmoil since Trump returned to the White House on January 20
ReutersAfter speaking with the Canadian Prime Minister earlier this week, Trump suggested that efforts from the US' northern neighbour to the flow of fentanyl into the country "was not good enough".
David Morrison, a senior market analyst at Trade Nation, broke down the state of the trade war prior to Trump's recent decision.
He shared: "The US Commerce Secretary Howard Lutnick said that there would be some softening of tariffs by Wednesday. This gave markets a boost. It turned out that levies on the auto industry would be delayed by a month.
"This was good news, particularly given the complex nature of cross-border movements of auto parts between the US, Mexico and Canada, in the manufacturing process. The news led to a sharp recovery in risk assets and strong gains for all the US majors of one per cent-plus."
