Mexico gets one month tariff reprieve

March 6, 2025

U.S. President Donald Trump said Mexico will be granted a monthlong reprieve on tariffs on goods that fall under an existing free-trade agreement. Trump made the announcement today, postponing tariffs imposed earlier this week, after a conversation with Mexican President Claudia Sheinbaum. (Washington Post, New York Times)

“This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum," Trump wrote. "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!”

U.S. commerce secretary Howard Lutnick said the reprieve would likely apply for Canadian goods as well, and comes a day after Trump said that carmakers compliant with US-Mexico-Canada Agreement would be granted a month-long carve-out from the 25 per cent tariffs. (Financial Times)

However, Trump pointedly attacked Justin Trudeau, his Canadian counterpart, shortly before announcing the temporary exemption for Mexican exports, notes the Guardian.

More Trade War

• Sheinbaum said, yesterday, that country could look for other trade partners, “if necessary,” referring to the possible continuation of the tariffs. (Reuters)

• The new U.S. tariffs could push Mexico and Canada into recession — “Trump’s decision to unwind decades of economic integration raises big questions about the future of North America and the industries that have been built around the idea of an economically integrated continent,” reports the New York Times.

• The tariffs are likely to cause U.S. companies that make products in Mexico to leave the country, which could lead to the loss of tens of thousands of Mexican jobs, and a contraction of the gross domestic product of more than 2 percent, reports the New York Times. Sheinbaum said a response would be a matter of “dignity.”

Regional Relations

• U.S. Vice President JD Vance said yesterday that Mexico should be thankful for Trump's war on drug cartels because it will stop the country from becoming a "narco state", adding that military intervention may be needed to tackle the cartels. (AFP)

• Panama President José Raúl Mulino accused Trump of lying when he said in his address to Congress, earlier this week, that his administration was “reclaiming” the Panama Canal, in reference to the sale of a concession of canal ports by a Chinese company to a U.S. led consortium. (See yesterday’s post.) “Once again, President Trump is lying. The Panama Canal is not in the process of recovery,” Mulino wrote on X. (Associated Press, Guardian)

• Brazil will use its presidency of the annual United Nations global climate talks to press for multilateralism and respect for science, COP30 President-Designate Andre Aranha Correa do Lago said yesterday in a rejoinder to Trump over climate matters, reports Reuters.

Venezuela

• Venezuelan President Nicolas Maduro said yesterday that his government would continue producing oil, a day after the United States gave energy giant Chevron a month to stop operations in the Caribbean country, reports Bloomberg.

Mexico

• Mexican journalist Kristian Zavala, founder and editor of the Facebook-based news outlet El Silaoense MX, and another man were shot by two unknown assailants on a motorcycle while driving along a highway in the central Mexican city of Silao on March 2. (Committee to Protect Journalists)

Regional

• InSight Crime looks at how organized crime in Latin America has deployed drones, which have turned out to be an effective and modern tactical advantage. “In countries like Brazil, Colombia, Mexico, and Panama, criminal groups are increasingly using these aerial devices to confront security forces, transport illicit goods, and intimidate communities.”

Bolivia

• Bloomberg has “a look inside the rowdy encampment protecting Evo Morales from arrest on rape charges” in Bolivia’s Cochabamba region.

El Salvador

• El Salvador’s President Nayib Bukele said his government would continue to buy Bitcoin even after inking a deal with the International Monetary Fund that was expected to halt accumulation of the digital currency, reports Bloomberg.

Argentina

• Wall Street expects the International Monetary Fund to lend Argentina as much as $20 billion in a new program that would represent another seal of approval for President Javier Milei’s austerity campaign, reports Bloomberg.

• Hundreds and thousands of people were affected by a power outage in Buenos Aires yesterday in the midst of a sizzling summer heat wave, reports the Associated Press. (It is really hot.)