Trump gives Mexico 90-day tariff reprieve as deadline for higher duties looms
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Mexican President Claudia Sheinbaum said she had talked tariffs with US President Donald Trump during a "very good" call on July 31.
PHOTO: EPA
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- Trump delayed tariffs on most Mexican goods for 90 days to negotiate a broader trade deal after a "very good" call with President Sheinbaum.
- Mexico will still face tariffs on steel, aluminium, copper, autos, and non-USMCA-compliant goods, and agreed to end Non Tariff Trade Barriers.
- The US is in trade negotiations with China and India, but Trump's use of emergency powers for tariffs is facing legal challenges.
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WASHINGTON - US President Donald Trump gave Mexico a 90-day reprieve from higher tariffs to negotiate a broader trade deal but was expected to issue higher final duty rates for most other countries as the clock wound down on his Aug 1 deal deadline.
The extension, which avoids a 30 per cent tariff on most Mexican non-automotive and non-metal goods compliant with the US-Mexico-Canada Agreement on trade, came after a morning call on July 31 between Mr Trump and Mexican President Claudia Sheinbaum.
“We avoided the tariff increase announced for tomorrow,” Ms Sheinbaum wrote in an X social media post, adding that the Trump call was “very good.”
Approximately 85 per cent of Mexican exports comply with the rules of origin outlined in the USMCA, shielding them from 25 per cent tariffs related to fentanyl, according to Mexico’s economy ministry.
Mr Trump said that the US would continue to levy a 50 per cent tariff on Mexican steel, aluminium and copper and a 25 per cent tariff on Mexican autos and on non-USMCA-compliant goods subject to tariffs related to the US fentanyl crisis.
“Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many,” Mr Trump said in a Truth Social post without providing details.
Mr Trump is expected to issue tariff rate proclamations later on July 31 for countries that have not struck trade deals by a 12.01am EDT deadline (12.01pm in Singapore).
South Korea agreed on July 30 to accept a 15 per cent tariff
But goods from India appeared to be headed for a 25 per cent tariff
Although negotiations with India were continuing, New Delhi vowed to protect the country’s labour-intensive farm sector, triggering outrage from the opposition party and a slump in the rupee.
Tough questions from judges
Mr Trump hit Brazil on July 30 with a steep 50 per cent tariff
The run-up to Mr Trump’s tariff deadline was unfolding as federal appeals court judges sharply questioned Mr Trump’s use of a sweeping emergency powers law to justify his sweeping tariffs of up to 50 per cent on nearly all trading partners.
Mr Trump invoked the 1977 International Emergency Economic Powers Act to declare an emergency over the growing US trade deficit and impose his “reciprocal” tariffs and a separate fentanyl emergency.
The Court of International Trade ruled in May that the actions exceeded his executive authority, and questions from judges during oral arguments before the US Appeals Court for the Federal Circuit in Washington indicated further scepticism.
“IEEPA doesn’t even say tariffs, doesn’t even mention them,” Judge Jimmie Reyna said at one point during the hearing.
China deal not done
US Treasury Secretary Scott Bessent said the United States believes it has the makings of a trade deal with China, but it is “not 100 per cent done,” and still needs Mr Trump’s approval.
US negotiators “pushed back quite a bit” over two days of trade talks with the Chinese in Stockholm this week, Mr Bessent said in an interview with CNBC.
China is facing an Aug 12 deadline to reach a durable tariff agreement with Mr Trump’s administration, after Beijing and Washington reached preliminary deals in May and June to end escalating tit-for-tat tariffs and a cut-off of rare earth minerals. REUTERS
