Trump grants one-month suspension of tariffs on Mexico, Canada under trilateral agreement

US President Donald Trump signed executive orders on Thursday to grant a one-month exemption from tariffs on Mexico and Canada under the United States-Mexico-Canada Agreement (USMCA).

"No tariffs on those goods from Canada and Mexico that claim and qualify for USMCA preference," the White House said in a fact sheet, while noting that 25-percent tariffs remain on goods that do not satisfy USMCA rules of origin.

"A lower 10-percent tariff on those energy products imported from Canada that fall outside the USMCA preference. A lower 10-percent tariff on any potash imported from Canada and Mexico that falls outside the USMCA preference," the White House said.

About half of goods coming into the United States from Mexico would fall under the exemption and around 38 percent of goods from Canada would qualify, the NBC News quoted a senior administration official as saying.

When signing the executive orders at the White House, Trump told reporters that the policy adjustments would help US automakers during the "short-term transition" from now until April 2, when wide-ranging "reciprocal tariffs" will be announced.

The day before, White House Press Secretary Karoline Leavitt said that Trump had decided to grant a one-month tariff exemption to the three major automakers -- Ford, General Motors, and Stellantis, temporarily waiving the 25-percent tariff on autos imported from Mexico and Canada under the USMCA.

Earlier on Thursday, Trump said on social media that tariffs on Mexico will be paused until April 2, applying to anything covered under the USMCA, a trade agreement negotiated, signed, and ultimately enacted during Trump's first term to replace the former North American Free Trade Agreement (NAFTA).

On Feb. 1, Trump signed an executive order imposing a 25-percent tariff on products imported from Mexico and Canada, with a 10-percent tariff increase on Canadian energy products.

On Feb. 3, Trump announced a 30-day delay in implementing the tariffs on both countries and continued negotiations. According to this decision, the relevant tariff measures were set to take effect on March 4.

Economists and observers have expressed deep concerns about the potential impact of the tariffs on the US economy.

In a report released Tuesday, the Tax Foundation, a Washington-based think tank focused on US tax policies, estimated that, without considering retaliatory measures, Trump's 25-percent tariffs on Canada and Mexico will reduce long-term GDP by 0.2 percent, reduce hours worked by 223,000 full-time equivalent jobs, and reduce after-tax incomes by an average of 0.6 percent.

For Mexico and Canada, the impact could also be significant.

"If sustained the impact of the US tariffs on Canada and Mexico can be expected to have a significant adverse economic impact on those countries given their very strong integration and exposure to the US market," IMF spokesperson Julie Kozack said at a press briefing Thursday.

Canadian Prime Minister Justin Trudeau said earlier that day that Canada will continue to be in a trade war with the United States for the foreseeable future.