US Suspends Some Tariffs On Canada, Mexico; Ottawa Halts Counter-Measures As Trade War Fears Rattle Markets

US President Donald Trump on Thursday (6 March) announced a temporary suspension of certain tariffs on imports from Canada and Mexico, a move that prompted Ottawa to hold off on its planned retaliatory measures, reported NDTV.

The decision comes amid concerns over the economic impact of broad-based tariffs, which had triggered a sharp decline in financial markets earlier in the week.

Market Jitters and Economic Concerns

The tariff policy, which included duties of up to 25 per cent, went into effect on Tuesday, sparking stock market turbulence as investors worried about its potential to slow US economic growth and drive inflation higher. 

In response, Trump signed new orders delaying tariffs on Canadian and Mexican imports covered under the United States-Mexico-Canada Agreement (USMCA), though he denied that market reaction influenced his decision.

Temporary Reprieve for the Auto Industry

One of the key sectors affected by the tariffs is automobile manufacturing, where production processes rely heavily on cross-border supply chains. 

After discussions with executives from Stellantis, Ford, and General Motors, the US government granted a one-month exemption on auto imports coming through the USMCA, postponing additional tariffs until 2 April.

Approximately half of Mexican imports will also continue to be affected under existing tariff structures.

Following Trump’s announcement, Canadian Finance Minister Dominic LeBlanc stated that Canada would suspend its planned countermeasures—which would have imposed tariffs on $125 billion worth of US goods—until 2 April, while diplomatic efforts continue to resolve the trade dispute.

While this temporary halt provides short-term relief, Trump reiterated that new tariffs would take effect on 2 April, maintaining that they would be "reciprocal in nature." 

Additionally, Trump confirmed that tariffs on steel and aluminum imports—set to begin next week—will proceed as planned, indicating that broader trade restrictions remain on the horizon.

Despite the partial tariff delay, US stock markets continued to slide on Thursday, reflecting investor uncertainty over the administration’s trade policy and its potential impact on global supply chains.