Mexico and the United States reached a last-minute deal on Monday, postponing planned tariffs for one month and preventing an immediate trade conflict. Earlier in the day, fears of the tariffs had caused global markets to drop.
A 25% tariff on Mexican goods was set to take effect Tuesday, despite an existing trade agreement that remains in place until 2026. Trump had originally signed this deal during his first term. Meanwhile, by midday, tariffs of 25% on Canadian goods and 10% on Chinese goods were still expected to move forward as scheduled.
As part of the agreement, Mexican President Claudia Sheinbaum committed to deploying 10,000 National Guard troops to the country’s northern border. In exchange, Trump agreed to take measures to slow the flow of American weapons into Mexico. The two leaders finalized the arrangement during an early-morning phone call on Monday.
Trump later described the discussion as “very friendly” in a post on Truth Social. He stated that Mexico’s troops would focus on stopping fentanyl and illegal migration into the US. He also confirmed that his Secretaries of State, Treasury, and Commerce would work with Mexican officials throughout the one-month pause on tariffs.
Sheinbaum confirmed the agreement, stating that Trump had made multiple proposals before they found common ground. “From the beginning, I made it clear that I wanted the tariffs to be suspended,” she said.
The Dow Jones Industrial Average dropped more than 650 points in early trading but rebounded slightly after news of the deal. Speculation about negotiations had grown when Sheinbaum delayed her regular press briefing. Moments before addressing the public, she announced the agreement on X, where her supporters welcomed the decision.
This development echoed events from Trump’s first presidency when his tariff threats were eased by Sheinbaum’s predecessor, Andrés Manuel López Obrador, who also sent troops to the border to discourage migration.
Trump warned over the weekend that tariffs could bring Americans “some pain,” as they function like a tax, increasing prices on imported goods. However, he defended the measure, arguing that tariffs would pressure other nations to help reduce illegal migration and fentanyl trafficking into the US.
Sheinbaum strongly rejected Trump’s claims that her government was working with cartels, calling the accusations “slanderous.” She had previously suggested a “Plan B” for potential retaliation, including tariff and non-tariff measures. She also highlighted Mexico’s seizure of over 40 tons of drugs—including 20 million fentanyl doses—over the last four months.
Additionally, Sheinbaum blamed the US for failing to prevent arms trafficking into Mexico and for not addressing its domestic demand for illegal drugs.
