Following urgent discussions, Canadian Prime Minister Justin Trudeau committed to increasing border security with the United States in an effort to curb migration and address the flow of fentanyl, a drug that has raised concerns in the US. Similarly, Mexican President Claudia Sheinbaum agreed to bolster security along the US-Mexico border by deploying additional troops. In exchange, the US agreed to reduce the flow of firearms into Mexico.
However, a 10% tariff on Chinese imports took effect on Tuesday after a deadline passed, with China swiftly retaliating. Beijing imposed tariffs on a range of US goods, including 15% on coal and liquefied natural gas, and 10% on crude oil and agricultural machinery.
On Monday, Trump and Trudeau reached a temporary deal to avoid tariffs for 30 days, with both leaders emphasising the significance of securing the US-Canada border. Trudeau confirmed Canada's commitment to a USD 1.3 billion border security plan, which includes deploying nearly 10,000 additional border agents and implementing measures to curb fentanyl trafficking. He also announced the appointment of a ‘fentanyl czar’ and the establishment of a joint US-Canada task force to tackle related crimes.
Canada had already introduced some of these border security measures in December, which involved increased collaboration with US law enforcement, better data sharing, and the use of surveillance tools such as drones and Black Hawk helicopters.
The agreement with Mexico, which was made shortly before, saw President Sheinbaum announcing the deployment of 10,000 National Guard troops to secure the southern border. She expressed satisfaction with the discussion, noting mutual respect for both countries’ sovereignty.
Trump has positioned tariffs as a means to bolster the US economy, safeguard jobs, and generate tax revenue, though economists have warned that reciprocal tariffs could raise the cost of various goods, such as cars, steel, food, and alcohol.
The announcement of tariff suspensions provided some immediate relief to markets, which had been rattled by the previous imposition of tariffs and concerns over a wider trade war. However, the potential for continued uncertainty remained a concern.
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