It’s only Monday, and the stock market is already off to a rough start. The S&P 500 took a dive after Donald Trump’s tariffs sparked serious concerns about the impact they’ll have on U.S. consumers. Trump announced the new tariffs on Friday, but they were set to kick in Monday evening, which left investors on edge.
But there’s a twist in the story—Mexico and Trump seem to have struck a temporary truce. In a “friendly” phone call, Trump and Mexico’s president, Claudia Sheinbaum, discussed pausing the tariffs for a month. The deal comes with a big catch: Mexico is agreeing to send 10,000 National Guard soldiers to its northern border to help control drug trafficking, especially fentanyl, which has been a major issue.
In exchange, the U.S. will work on curbing the flow of high-powered weapons into Mexico, a long-standing problem between the two countries. And while the retaliatory tariffs Mexico had planned to slap on American goods are now on hold, it’s clear that these pauses are just temporary. If no permanent deal is reached by March, the tariffs will go into effect for real.
Trump, who’s been pretty upfront about the potential “pain” these tariffs could bring to U.S. consumers, is sticking to his guns. He argues the tariffs are necessary to get tougher on border security, even if it means some short-term economic discomfort. “I look forward to participating in those negotiations” with Sheinbaum, Trump wrote on Truth Social, teasing that a permanent agreement might be on the horizon.
This isn’t the first time Trump has had a tough relationship with Mexico. Over the past few months, his administration has clashed with Sheinbaum’s government over issues like immigration, drug control, and even the renaming of the Gulf of Mexico to the Gulf of America.
And the tensions aren’t just with Mexico. Trump’s relationship with Canada, and its prime minister, Justin Trudeau, has also been rocky. Trump’s made some eyebrow-raising comments about Canada possibly becoming the 51st U.S. state, with Trudeau as the governor, so it’s safe to say things aren’t exactly smooth between the two leaders.
Trump and Trudeau spoke by phone Monday morning, but a senior Canadian official said they’re not holding their breath for a quick tariff pause like Mexico got. As the situation continues to unfold, the markets remain jittery, and the risk of “disarray” could still be very much on the table.
Looks like it’s shaping up to be a wild week.
