As United States President Donald Trump’s sweeping 25-percent tariffs on imports from Mexico and Canada were about to kick in on Tuesday, Canadian Prime Minister Justin Trudeau hit back.
Even before the tariffs actually came into effect, Trudeau put out a statement, calling the tariffs “unjustified” and imposing immediate retaliatory tariffs. Then, a few hours later, on Tuesday morning, he addressed a news conference where he referred to Trump as “Donald”, called the tariffs a “very dumb thing to do”, and accused the US president of trying to cripple the Canadian economy to annex the country.
In contrast, Mexican President Claudia Sheinbaum’s first comments only came in a news conference on Tuesday. She promised to defend Mexican interests. But while announcing tit-for-tat tariffs on US imports, she said these would only come into effect on Sunday, giving it time to strike a deal with the US.
That deal came over a phone call with Trump on Thursday, during which, according to Sheinbaum’s account, the US president initially refused to budge on the tariffs. But the Mexican president persisted – and, by the end, Trump had relented.
He announced a waiver until April 2 from the tariffs on all Mexican imports covered by the US-Mexico-Canada trade agreement (USMCA) and used warm words for Sheinbaum. “I did this as an accommodation, and out of respect for, President Sheinbaum,” he wrote on his social media site, Truth Social. “Our relationship has been a very good one and we are working hard, together, on the border.”
Later, he extended that reprieve to Canada, too – but continued to target Trudeau, whom he has repeatedly mocked and made unsubstantiated claims against.
So why is Mexico’s president approaching Trump’s tariffs so differently from how Canada and Trudeau are handling them? What did she say to Trump on Thursday? How is Mexico responding to Sheinbaum’s strategy? How did we get here? And what’s at stake?
What are Trump’s tariffs, and what’s his justification?
Even before he was sworn into office for a second time in January, Trump announced he would impose 25-percent tariffs on all goods from Canada and Mexico, citing concerns over border security and drug trafficking, particularly the flow of fentanyl into the US.
The US is the second-largest goods trader in the world after China, and Trump’s tariffs have rattled global markets.
These tariffs were initially scheduled to take effect on February 4, but negotiations between Trump and the leaders of Canada and Mexico resulted in the US postponing their imposition for a month.
In those negotiations, Trudeau and Sheinbaum agreed to boost border security to prevent drug trafficking and the entry of migrants into the US.
Trudeau appointed a “fentanyl czar” to tackle that issue. Sheinbaum deployed 10,000 additional soldiers to the US-Mexico border to help curb irregular immigration. Within Mexico, her law enforcement agencies busted fentanyl gangs, raided labs and made arrests. Last week, Mexico sent 29 drug cartel leaders to the US for prosecution.
Still, on Tuesday, Trump enacted the 25-percent tariffs, affecting a wide array of goods, before partly – and temporarily – rolling them back on Thursday. Additional tariffs were also imposed on China.
The US’s top three trading partners – Mexico, Canada and China – account for more than 35 percent of the goods that the world’s largest economy imports or exports.
How did Canada respond?
Canada responded promptly and assertively to the US tariffs with retaliatory protectionist measures of its own that it had first announced on February 1.
Starting on Tuesday, Canada imposed 25-percent tariffs on $21bn worth of US goods with the threat of tariffs on another estimated $87bn if the dispute lasts.
Trudeau warned that Canada “will not back down from a fight” and tariffs would remain in place until the US tariffs are withdrawn.
Products including meats, grains, certain alcohol, clothes, footwear, motorcycles and cosmetics are just some of the US goods that will be subject to immediate tariffs, according to Canada’s Department of Finance.
Some Canadian provinces have taken steps of their own, ordering the removal of all US liquor from stores, for instance.
Trudeau, in comments on Tuesday, also seemed to back Canadians who are choosing to boycott American goods and boo the US national anthem at sporting events.
Trudeau had a call with Trump on Wednesday, but while the US president said it ended on a “somewhat ‘friendly'” note, he subsequently accused Canada of allowing fentanyl to enter the US – even though experts said only a minuscule amount of the opioid comes into the US across its northern border.
Ultimately, relief in the form of tariff exemptions on Canadian imports into the US that are covered by the USMCA only came after Trump’s call with Sheinbaum the following day.
How has Mexico responded?
While Trump and Trudeau have exchanged heated personal remarks in recent weeks, Sheinbaum has taken a more measured approach.
In her comments on Tuesday, Sheinbaum expressed the intention to implement “tariff and non-tariff measures” to safeguard Mexico’s interests but refrained from immediate action, suggesting she intends to exhaust all diplomatic channels first.
“What I can tell you is that this is a very definitive moment for Mexico … There is not going to be submission. Mexico is a great country, and Mexicans are brave and resistant,” she said.
If the tariffs continued, Mexico would “reach out to Canada and other nations”, Sheinbaum said. She added that Mexico may look for other trading partners besides the US and could shift trade alliances “if necessary”.
What did Sheinbaum tell Trump on Thursday?
Recounting her conversation with Trump at a news conference later on Thursday, Sheinbaum said Trump initially insisted that the tariffs enforced on Tuesday would stay.
But Sheinbaum sent Trump a chart that demonstrated how seizures of fentanyl by agents along the US-Mexico border had fallen dramatically since she sent her 10,000 soldier-strong force there.
She told him their collaboration was yielding results in strengthening security along the border, and the tariffs would hurt that partnership, Sheinbaum told reporters.
The pitch worked.
On Truth Social, Trump announced that tariffs on Mexican imports covered by the USMCA would be waived until April 2, when he intends to implement reciprocal tariffs on all countries. He spoke of his respect for Sheinbaum. “Thank you to President Sheinbaum for your hard work and cooperation!” he said.
The Mexican president reciprocated the gesture, with a message of her own. “Many thanks to President Donald Trump. We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results, within the framework of respect for our sovereignties,” she wrote on X.
What’s behind Sheinbaum’s relatively measured approach?
At a briefing with reporters in early February, Sheinbaum offered insights into her mindset, saying that amid threats from Trump, Mexico needed to keep a “cool head”.
This cautious strategy reflects Mexico’s heavy reliance on the US as a market: More than 75 percent of Mexico’s exports go to its northern neighbour, so any dramatic disruption in that equation could bleed the country’s economy. Last year, the US imported $505.8bn in goods from Mexico and exported $334bn, resulting in a trade deficit of $171.8bn.
To be sure, Canada also needs the US for its exports: More than 70 percent of Canadian exports go to the US.
But the context of Trump’s tariffs on Mexico and Canada is quite different, Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, told Al Jazeera.
While Trump in the past has mooted the idea of bombing Mexico’s drug cartels, many of which his administration has designated as “terrorist” organisations, he has been much more direct in seeking Canada’s territory.
Trump has frequently said his northern neighbour should become the 51st US state.
And while Trump has said he respects Sheinbaum, he has repeatedly referred to Trudeau, including after their call on Wednesday, as governor rather than prime minister.
“In Canada’s case, Trudeau noted that Trump’s actions are aimed at crippling the Canadian economy to pave the way for an eventual annexation, which goes beyond a mere trade war,” Nadjibulla said, referring to Trump’s repeated threats to absorb Canada.
“It’s an existential fight for Canada’s sovereignty, so there’s a strong incentive to push back immediately and forcefully,” she said.
Commenting on the new tariffs, Trudeau on Tuesday said Trump was planning to cause the “total collapse of the Canadian economy because that will make it easier to annex us”.
“Retaliation here isn’t just about tit-for-tat tariffs. It’s about defending the country’s independence,” Nadjibulla said.
Sheinbaum also has something that Trudeau does not: Time.
Canada is fast approaching national elections, and Trudeau’s Liberal Party is playing catch-up. After trailing the opposition Conservative Party by double digits for more than a year, the country’s governing party has started to rapidly close the gap as Trudeau pushes back against Trump’s moves and the US president’s steps stoke a wave of patriotism among Canadians.
Sheinbaum, on the other hand, took office only in October and is wildly popular. In two polls in February, her approval rating was 80 percent and 85 percent.
Is Sheinbaum’s approach working?
It’s too early to say.
But on Wednesday, the Trump administration exempted auto manufacturers from the 25-percent tariffs for a month. While the sector’s supply chains are spread across North America, Mexico is the biggest beneficiary of the reprieve. Cars, trucks, other vehicles and auto parts constitute 27 percent of its exports to the US. For Canada, that figure stands at 13 percent.
Then, on Thursday, she won a reprieve on tariffs for all Mexican exports covered by the USMCA.
And Sheinbaum enjoys more than just popular support in Mexico. Her approach to Trump and his tariffs appears to have the trust of Mexican investors, too.
The IPC, the main index of the country’s stock exchange, is up 6 percent from the start of the year. By contrast, the S&P/TSX, the benchmark Canadian stock exchange index, is almost where it was at the start of the year.
What’s next?
Even with the temporary reprieve on Thursday, many goods exported by Mexico and Canada to the US – including Canadian oil, for instance – are not covered by the USMCA and so are subject to Trump’s tariffs. Canadian oil faces a 10 percent tariff. And on April 2, Trump plans to introduce across-the-board reciprocal tariffs on countries around the world.
With such tariffs, and the retaliatory steps taken by other countries, businesses exporting goods and services as well as consumers will pay higher prices. A potential recession in some or all three North American countries is a possibility.
But even if Trump decides to de-escalate, Nadjibulla said, “the damage to trust is already substantial.”
“We’ve seen him threaten new tariffs in April and continue to shift targets. That level of unpredictability erodes confidence among allies and trading partners,” she said.
The tariffs could also affect negotiations on renewing the USMCA, a free-trade pact that came into effect in 2020, was negotiated by Trump’s team during his first term and replaced the North American Free Trade Agreement of 1994. A review of the USMCA is due in 2026, but the tariffs could see talks take place sooner.
“How do you negotiate a stable agreement when one party is consistently changing the rules or imposing new tariffs without warning?” Nadjibulla asked.
“Even if some tariffs get lifted or eased, the bigger issue is that Canada and others now view the US as a less reliable trade partner,” she added.
