Jerry Jackson Mexico and the United States struck a one-month agreement on Monday, putting planned tariffs on hold and easing fears of a trade war. The threat of these tariffs had already sent global markets tumbling earlier in the day.
A 25% tariff on Mexican goods was scheduled to take effect Tuesday, despite an existing trade pact that remains valid until 2026. Trump had originally signed that agreement during his first term. Meanwhile, by midday, tariffs of 25% on Canadian goods and 10% on Chinese goods still appeared set to proceed as planned.
As part of the deal, Mexican President Claudia Sheinbaum agreed to send 10,000 National Guard troops to the northern border. In return, Trump committed to working on limiting the flow of American weapons into Mexico. The two leaders finalized the arrangement during an early-morning phone call on Monday.
Trump later described the discussion as “very friendly” in a post on Truth Social. He stated that Mexico’s troops would be tasked with stopping the movement of fentanyl and illegal migrants into the United States. He also announced that his Secretaries of State, Treasury, and Commerce would engage with Mexican officials throughout the monthlong suspension of tariffs.
Sheinbaum confirmed the agreement, explaining that Trump had presented several proposals and that they had reached common ground. “From the beginning, I told him I wanted the tariffs to be postponed,” she said.
The Dow Jones Industrial Average plunged more than 650 points in early trading but recovered slightly after news of the deal broke. Observers had speculated about an agreement after Sheinbaum postponed her daily press briefing. Just before speaking publicly, she shared news of the resolution on X, where supporters welcomed the announcement.
This situation mirrored a similar event during Trump’s first presidency when his tariff threats against Mexico were defused by Sheinbaum’s predecessor, Andrés Manuel López Obrador, who also deployed troops to deter migrants.
Trump warned over the weekend that tariffs might cause Americans “some pain,” since they act like a tax, raising consumer prices. However, he insisted that such measures were necessary to push other nations to curb illegal migration and drug trafficking into the US.
Sheinbaum pushed back against Trump’s allegations that her administration was collaborating with cartels, calling them “slanderous.” She had previously prepared a “Plan B” for potential retaliation, including tariff and non-tariff countermeasures. She also highlighted Mexico’s seizure of over 40 tons of drugs—including 20 million fentanyl doses—over the last four months.
Additionally, Sheinbaum criticized the US for failing to crack down on arms trafficking to Mexican cartels and reducing the demand for illegal drugs within its own borders.