President Donald Trump continued to send mixed signals about his tariff plans Wednesday — granting U.S. automakers a one-month reprieve on new 25% duties imposed on Canada and Mexico, while continuing to deem Canada's efforts to tackle drug and migrant flows insufficient.
In posts on his Truth Social platform, the president said that after speaking with Canadian Prime Minister Justin Trudeau, he had decided that the improvements Trudeau mentioned toward halting fentanyl and undocumented persons from entering the U.S. "not good enough" to lift the duties.
Shortly thereafter, White House Press Secretary Karoline Leavitt said Trump had spoken with the "Big 3" American automakers — Ford, GM, and Stellantis (formerly Chrysler) — and granted them a one-month exemption on paying the 25% duties on autos produced in their Canadian or Mexican facilities.
The president is set to speak with Mexico’s Claudia Sheinbaum Thursday.
The updates contributed to a yo-yo day in stocks Wednesday that saw major indexes ultimately recovering from earlier declines. Just before 2 p.m., the S&P 500 had climbed 0.67% on the day, while the tech-heavy Nasdaq gained about 1%.
In his address to Congress Tuesday night, Trump indicated he would not relent on his tariffs scheme.
“We will take in trillions and trillions of dollars and create jobs like we have never seen before,” the president told Congress in the first State of the Union speech of his second term.
Trump acknowledged there could be difficulties along the way, particularly for the agriculture industry, which has already faced retaliatory tariffs from China and Canada in response to tariffs Trump has put on those countries. He told farmers that there “may be a little bit of an adjustment period,” that they “will probably have to bear with me again.”
Tariffs or customs duties are a tax on products purchased from abroad, and they are used by practically all countries
“Tariffs are about making America rich again and making America great again. And it’s happening, and it will happen rather quickly,” he said. “There’ll be a little disturbance, but we’re OK with that. It won’t be much.”
Shortly before markets opened, ADP reported that private sector job creation slowed in February with companies adding just 77,000 workers, far below the 186,000 jobs added in January and below the 148,000 Dow Jones consensus estimate. Education and health services had some of the weakest job growth last month while manufacturing, construction and leisure and hospitality showed strength, the data showed.
Businesses including automakers, alcohol producers and major retailers, like Target, have warned that the added costs for companies to import goods from Canada and Mexico will have wide-ranging implications across the American economy and lead to higher prices for consumers.
Tariffs are paid by the U.S.-based company importing the goods into the country. Those companies can either pass the added costs on to their customers in the form of higher prices, absorb the tariffs by cutting costs elsewhere or take a hit on profits.
Uncertainty around tariffs on Mexico and Canada has been looming for months after Trump first raised the threat shortly after his election. Last month, Trump said he would be enacting tariffs on the two countries on Feb. 4 only to announce he was delaying the move by a month the day before the tariffs were set to be collected. This week, Trump said the countries hadn’t done enough over the past month to stop the flow of fentanyl and began collecting the tariffs at midnight on Tuesday.
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