Mexico and the United States reached a last-minute deal on Monday, delaying tariffs for one month and preventing an immediate trade war. The threat of tariffs had caused global markets to tumble early in the day.
A 25% tariff on Mexican goods was scheduled to take effect Tuesday, despite an existing trade agreement that remains valid until 2026. Donald Trump had originally signed this deal during his first term. However, by midday, tariffs on Canadian (25%) and Chinese (10%) goods still appeared set to proceed.
As part of the agreement, Mexican President Claudia Sheinbaum committed to deploying 10,000 National Guard troops to the northern border. In return, Trump agreed to take measures to curb the flow of American weapons into Mexico. The two leaders reached the agreement during a phone call early Monday.
Following the conversation, Trump posted on Truth Social, calling the discussion “very friendly.” He emphasized that Mexico’s troops would focus on stopping fentanyl and illegal migration into the US. Trump also announced that his Secretaries of State, Treasury, and Commerce would collaborate with Mexican officials during the monthlong pause.
Sheinbaum later confirmed the agreement, stating that Trump had made multiple proposals and that they had reached common ground. “I told him from the start that I wanted the tariffs to be suspended,” she said.
The Dow Jones Industrial Average initially dropped over 650 points before recovering slightly after news of the deal. Sheinbaum’s delay of her daily press conference further fueled speculation that negotiations were underway. Shortly before speaking publicly, she announced the agreement on X, where supporters cheered the decision.
This negotiation echoed events from Trump’s first administration when his tariff threats were defused by Sheinbaum’s predecessor, Andrés Manuel López Obrador, who also sent troops to the border.
Over the weekend, Trump warned that tariffs might cause Americans “some pain,” as they function like a tax, increasing prices for consumers. However, he defended the measure, arguing that tariffs would pressure other countries to reduce the flow of migrants and fentanyl into the US.
Sheinbaum, in turn, criticized Trump’s claims that her government was colluding with cartels, calling them “slanderous.” She had previously warned of a “Plan B” with potential retaliatory tariffs. She also highlighted Mexico’s success in seizing over 40 tons of drugs—including 20 million doses of fentanyl—over the past four months.
Sheinbaum further pointed to the US as a major contributor to Mexico’s challenges, blaming it for failing to curb weapons trafficking and reducing domestic drug consumption.
