US suspends tariffs on Mexico for one month as high-level talks on key issues start
Jonathan Lopez
03-Feb-2025
SAO PAULO (ICIS)–The US has agreed to pause for one month its 25% import tariffs on Mexican goods as the two countries agreed setting up working groups on three key issues, the presidents of both countries said on Monday.
Over the weekend, the US announced also a 25% tariff on Canadian goods and a 10% tariff on Chinese goods.
The move – now suspended regarding Mexico trade – is expected to increase costs for the US’s chemical industry and create supply-chain snarls as well as risking retaliation from countries on which tariffs are imposed.
Speaking to reporters, Mexico’s Claudia Sheinbaum said she had agreed with US president Donald Trump during a phone call to set up three bilateral working groups on border security issues, on fentanyl trade – a powerful drug which has caused havoc across the US – and on guns and arms traffic from the US to Mexico.
Mexico’s main stock exchange, which had opened Monday trading with a fall of nearly 2%, was turning green soon after Sheinbaum spoke to reporters.
The Mexican peso was also gaining ground against the dollar.
As part of the agreement, Mexico will deploy members of the National Guard to the border with the US.
Trump confirmed on a post on social media he had a “friendly conversation” with Sheinbaum, although he only mentioned border security and fentanyl as part of the agreement to pause the tariffs for one month.
“She [Sheinbaum] agreed to immediately supply 10,000 Mexican Soldiers on the border separating Mexico and the US. These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our country,” said Trump in his owned social media network TruthSocial.
“We will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico. I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two countries.”
Sheinbaum confirmed the two presidents will be actively involved in the talks, and it will be them who ultimately assess progress on the talks, although she said there is no date for any physical meeting between them.
“The tariffs have been put on hold for a month, which is very important. We will work together on the two issues of security and fentanyl, and he [Trump] will also review the issue of arms trafficking from the US to Mexico,” said Sheinbaum.
“I am sure that this month we will be able to give results, good results for the people, good results for the people of Mexico – it was a good conversation within a respectful framework of respect.”
Mexican journalists pushed Sheinbaum on the potential deportation of millions of Mexicans who are residing and working in the US illegally, some of them for years. Their remittances sent home are key for many Mexican households to make ends meet.
President Trump has said he intends to deport many undocumented migrants.
The president did not say whether that was part of the one-month talks coming up.
“We have a working group [on this issue already] where we talk about the defense of Mexicans in the US. They will have always have our support, always, above all else, not only because it is the obligation of the president to defend Mexicans anywhere in the world, and particularly in the US, but we do it with conviction, with a lot of solidarity and love,” she said.
Sheinbaum added that her success in pausing the tariffs was not hers alone and thanks Mexican businesses and policymakers who all came out against the tariffs, as well as counterparts in the US who did the same.
The tariffs, if prolonged in time, would have caused havoc to the already slowing Mexican economy, with manufacturing having greatly felt the pinch during 2024.
“When the tariffs were announced, a very large wave of public communications against them came out. I want to thank companies, business chambers, communities that came out to defend Mexico and to support the President and the truth is that this gives a lot of strength when one sits down to talk with a leader from another country, particularly the US,” said Sheinbaum.
“Many people in the US came out to say that the tariffs don’t make sense and would thank them a lot as well. Politicians, governors, congressmen, but also many companies from the US that came out to say that this is not convenient. That environment led to the agreement that we have today.”
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.
READ MORE
