U.S. President Donald Trump announced on Thursday a one-month delay on tariffs for all products from Mexico covered under the United States-Mexico-Canada Agreement (USMCA), marking a significant shift in his administration’s trade policy. The move follows discussions with Mexican President Claudia Sheinbaum and comes amid economic and political turmoil sparked by the tariffs.

Commerce Secretary Howard Lutnick also indicated that a similar delay for Canada could be announced later in the day, though negotiations were ongoing, and no final decision had been reached. A senior Canadian government source told CNN that there was no clarity on whether the tariffs affecting Canada would be lifted.

Trump took to Truth Social to confirm the decision, stating, “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA Agreement.” He specified that the tariffs would now be delayed until April 2.

“I did this as an accommodation, and out of respect for President Sheinbaum. 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,” Trump added, praising Sheinbaum for her cooperation.

In response, Sheinbaum thanked Trump for what she described as a “respectful” discussion, emphasizing that nearly all of Mexico’s trade with the U.S. falls under the USMCA framework.

While Trump softened his stance toward Mexico, Canada’s trade situation remains unclear. Earlier in the week, Trump imposed a 25% tariff on Canadian goods that fell under the trade treaty. Secretary Lutnick suggested that these tariffs could also be paused, pending progress in combating fentanyl trafficking into the United States.

However, Canadian officials remained skeptical. A senior government source indicated that while discussions were ongoing, “there is no clarity on whether or not the tariffs will be lifted for Canada.” Trump’s relationship with Canadian Prime Minister Justin Trudeau has been notably strained, with Trump accusing Trudeau of using the trade issue for political gain.

“Believe it or not, despite the terrible job he’s done for Canada, I think that Justin Trudeau is using the Tariff problem, which he has largely caused, in order to run again for Prime Minister,” Trump wrote on Truth Social. Trudeau, in a press conference, countered that Canada would maintain all retaliatory measures unless the U.S. fully rolls back its tariffs.

Ontario Premier Doug Ford weighed in, urging a renegotiation of USMCA rather than a prolonged trade war. “Let’s just drop these tariffs. Let’s renegotiate the USMCA deal that he created,” Ford told CNN.

Markets reacted negatively to the uncertainty surrounding the tariffs. The Dow fell by 500 points (1.1%), the S&P 500 dropped 1.7%, and the tech-heavy Nasdaq declined by 2.2%. Investors have expressed concerns over the Trump administration’s trade policies, with the Nasdaq falling 6.4% and the S&P 500 down more than 3% since Trump took office.

Businesses have slowed hiring, and consumer confidence has declined amid fears of rising prices. In his address to Congress earlier in the week, Trump acknowledged the economic challenges posed by the tariffs but urged patience, stating, “there will be a little disturbance.”

Trump’s trade policies have been marked by frequent reversals. While he initially pledged steep tariffs, he has often delayed or modified them after facing political and economic pushback. The latest round of tariffs, announced on February 1, was initially delayed by negotiations over border security and fentanyl trafficking.

On February 4, tariffs on Chinese imports were implemented at a reduced 10% rate instead of the promised 60%, while the controversial de minimis exclusion—allowing goods under $800 to enter duty-free—was briefly removed, only to be reinstated shortly after.

Meanwhile, Trump’s proposed “reciprocal tariffs,” intended to match foreign tariffs dollar-for-dollar, remain vaguely defined, with industries such as autos, copper, microchips, pharmaceuticals, and lumber floated as potential targets but without concrete details.

Steel and aluminum tariffs set to take effect on March 12 are also expected to be relatively minor adjustments rather than sweeping new policies.

Following the latest round of tariff announcements, stocks tumbled. Concerned about the economic fallout, Trump and his administration closely monitored the markets. On Wednesday, the White House responded by pausing auto tariffs on Mexico and Canada. Now, the broader tariffs on Mexico have been delayed, but the fate of Canadian tariffs remains in limbo.