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Trump Agrees to Pause Tariffs on Mexico, but Import Taxes Still in Place for Canada and China

In an aerial view, vehicles sit in traffic while waiting to cross the US-Mexico border on February 03, 2025 in Laredo, Texas. (Getty Images via AFP)
In an aerial view, vehicles sit in traffic while waiting to cross the US-Mexico border on February 03, 2025 in Laredo, Texas. (Getty Images via AFP)
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Trump Agrees to Pause Tariffs on Mexico, but Import Taxes Still in Place for Canada and China

In an aerial view, vehicles sit in traffic while waiting to cross the US-Mexico border on February 03, 2025 in Laredo, Texas. (Getty Images via AFP)
In an aerial view, vehicles sit in traffic while waiting to cross the US-Mexico border on February 03, 2025 in Laredo, Texas. (Getty Images via AFP)

US President Donald Trump and Mexican President Claudia Sheinbaum put their planned tariffs on hold Monday for a month to give time for further negotiations, and Mexico said it planned to deploy 10,000 members of its national guard to address drug trafficking.

Trump’s tariffs against Canada and China were still slated to go into effect Tuesday, but uncertainty remained about the durability of any deals and whether the tariffs were a harbinger of a broader trade war, as Trump has promised more import taxes to come.

The US and Mexican leaders announced the pause after what Trump described on social media as a "very friendly conversation," and he said he looked forward to the upcoming talks.

Trump said the talks would be headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent and Secretary of Commerce Howard Lutnick and high-level representatives of Mexico.

"I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries," the president said.

As a condition ahead of the talks, Sheinbaum laid out changes in border policies, and Trump confirmed Mexico's deployment of troops.

"Mexico will reinforce the northern border with 10,000 members of the National Guard immediately, to stop drug trafficking from Mexico to the United States, in particular fentanyl," Sheinbaum posted on X. "The United States commits to work to stop the trafficking of high-powered weapons to Mexico."

Trump posted earlier on social media that he spoke Monday morning with Canadian Prime Minister Justin Trudeau and would speak with him again at 3 p.m. Both Canada and Mexico had plans to levy their own tariffs in response to US actions, but Mexico is holding off for the moment.

Trump used his social media post to repeat his complaints that Canada has been uncooperative, despite decades of friendship and partnerships that range from World War II to the response to the 9/11 terrorist attacks on the United States.

"Canada doesn’t even allow US Banks to open or do business there," Trump posted. "What’s that all about? Many such things, but it’s also a DRUG WAR, and hundreds of thousands of people have died in the US from drugs pouring through the Borders of Mexico and Canada."

Financial markets, businesses and consumers are trying to prepare for the possibility of the new tariffs. Stock markets opened with a modest selloff, suggesting some hope that the import taxes that could push up inflation and disrupt global trade and growth would be short-lived.

But the outlook reflected a deep uncertainty about a Republican president who has talked with adoration about tariffs, even saying the US government made a mistake in 1913 by switching to income taxes as its primary revenue source.

Trump said Sunday the tariffs would lift if Canada and Mexico did more to crack down on illegal immigration and fentanyl smuggling, though there are no clear benchmarks. Trump also said the US can no longer run a trade imbalance with its two largest trade partners.

Mexico is facing a 25% tariff, while Canada would be charged 25% on its imports to the United States and 10% on its energy products. China is facing a 10% additional tariff due to its role in the making and selling of fentanyl, the Trump White House said.

Kevin Hassett, director of the White House National Economic Council, said Monday that it was misleading to characterize the showdown as a trade war despite the planned retaliations and risk of escalation.

"Read the executive order where President Trump was absolutely, 100% clear that this is not a trade war," Hassett said. "This is a drug war."

But even if the orders are focused on illegal drugs, Trump's own remarks have often been more about his perceived sense that foreign countries are ripping off the United States by running trade surpluses.

On Sunday, Trump said that tariffs would be coming soon on countries in the European Union. He has discussed tariffs as both a diplomatic tool on national security issues, a way to raise revenues and a vehicle for renegotiating existing trade pacts.

Multiple economists outside the administration have warned that the tariffs would push up prices and hamper growth, with Trump himself saying there would be some short-term pain after having campaigned last year on the promise that he could tame inflation.

Joe Brusuelas, chief economist at the consultancy RSM, said the United States was unlikely to fall into a recession this year, but the tariffs would hurt growth and push up the cost of government borrowing, which would potentially keep the interest rates charged on mortgages and auto loans elevated.

"If there is no resolution, the impact on the US economy will be significant," he said. "Growth will slow notably from the 2.9% average over the past three years as inflation and interest rates rise. The yield on the 10-year Treasury, currently around 4.5%, could climb to a range between 4.75% and 5%."

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Business

Iran Inflation Rate Rises to 50.6 Percent

A shopkeeper arranges items at his shop around the traditional grand bazaar of Tehran, Iran, Sunday, March 29, 2026. (AP)
A shopkeeper arranges items at his shop around the traditional grand bazaar of Tehran, Iran, Sunday, March 29, 2026. (AP)
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Iran Inflation Rate Rises to 50.6 Percent

A shopkeeper arranges items at his shop around the traditional grand bazaar of Tehran, Iran, Sunday, March 29, 2026. (AP)
A shopkeeper arranges items at his shop around the traditional grand bazaar of Tehran, Iran, Sunday, March 29, 2026. (AP)

Iran's annual inflation rate rose to 50.6 percent by mid-March, up three percentage points from the previous month, the country's official statistics center said on Sunday.

"The inflation rate for the twelve months ending in Esfand (from February 20 to March 20) reached 50.6 percent," the center said in a statement carried by the official IRNA news agency.

The rate had stood at 47.5 percent in the previous month, covering the period from January 21 to February 19.

The rise in prices comes with Iran at war with the United States and Israel since February 28, when strikes that killed the country's supreme leader triggered a conflict that has since spread across the Middle East.

On March 20, Iran marked the start of the Nowruz holidays, the Persian New Year.

Business

Worries About Global Economic Pain Deepen as the War in Iran Drags on

A worker refills the tank of a car at a gasoline station in Macau on March 27, 2026. (AFP)
A worker refills the tank of a car at a gasoline station in Macau on March 27, 2026. (AFP)
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Worries About Global Economic Pain Deepen as the War in Iran Drags on

A worker refills the tank of a car at a gasoline station in Macau on March 27, 2026. (AFP)
A worker refills the tank of a car at a gasoline station in Macau on March 27, 2026. (AFP)

US and Israeli attacks on Iran have driven up prices, darkened the outlook for the world economy, sent global stock markets reeling and forced developing countries to ration fuel and subsidize energy costs to protect their poorest.

Ongoing strikes and counterstrikes on Persian Gulf refineries, pipelines, gas fields and tanker terminals threaten to the prolong the global economic pain for months, even years.

“A week ago or certainly two weeks ago, I would have said: If the war stopped that day, the long-term implications would be pretty small,” said Christopher Knittel, an energy economist at the Massachusetts Institute of Technology. “But what we’re seeing is infrastructure actually being destroyed, which means the ramifications of this war are going to be long-lived.”

Iran has hit Qatar’s Ras Laffan natural gas terminal, which produces 20% of the world’s liquefied natural gas. The March 18 strike wiped out 17% of Qatar’s LNG export capacity and repairs will take up to five years, state-owned QatarEnergy said.

The war caused an oil shock from the get-go. Iran responded to US and Israeli attacks Feb. 28 by effectively closing off the Strait of Hormuz, a transit point for a fifth of the world’s oil, by threatening tankers trying to pass through.

Gulf oil exporters like Kuwait and Iraq cut production because there was nowhere for their oil to go without access to the strait. The loss of 20 million barrels of oil a day delivered what the International Energy Agency calls the “largest supply disruption in the history of the global oil market.”

The price for a barrel of Brent crude oil climbed 3.4% on Friday to settle at $105.32. That was up from roughly $70 just before the war began. Benchmark US crude rose 5.5% to settle at $99.64 per barrel.

“Historically, oil price shocks like this have led to global recessions,” Knittel said.

The war also has dredged up a bad economic memory from the oil shocks of the 1970s: stagflation.

“You’re raising the risk of higher inflation and lower growth,” said the Harvard Kennedy School's Carmen Reinhart, a former World Bank chief economist.

Gita Gopinath, former chief economist at the International Monetary Fund, recently wrote that global economic growth, expected before the war to register 3.3% this year, would be 0.3 to 0.4 percentage points lower if oil prices averaged $85 a barrel in 2026.

Fertilizer shortages and price hikes hurt farmers

The Gulf accounts for a big share of exports of two key fertilizers, a third of urea and a quarter of ammonia. Producers in the region enjoy an advantage: easy access to low-cost natural gas, the primary feedstock for nitrogen fertilizers.

Up to 40% of world exports of nitrogen fertilizer pass through the Strait of Hormuz.

Now that the passage is blocked, urea prices are up 50% since the war and ammonia 20%. Big agricultural producer Brazil is especially vulnerable because it gets 85% of its fertilizer from imports, Alpine Macro commodity strategist Kelly Xu wrote in a commentary. Egypt, a big fertilizer producer itself, needs natural gas to make the stuff and production falters when it can’t get enough.

Eventually, higher fertilizer prices are likely to make food more expensive and less abundant as farmers skimp on it and get lower yields. The squeeze on food supplies will land hardest on families in poorer countries.

The war also has disrupted world supplies of helium, a byproduct of natural gas and a key input in chipmaking, rockets and medical imaging. Qatar makes helium at the Ros Laffan facility and supplies a third of the world’s helium.

Rationing gas and limiting the air conditioning

“No country will be immune to the effects of this crisis if it continues to go in this direction,” International Energy Agency head Fatih Birol said on March 23.

Poorer countries will be hit hardest and face the biggest energy shortages “because they will be outbid when competing for the remaining oil and natural gas,” said Lutz Kilian, director of the Center for Energy and the Economy at the Federal Reserve Bank of Dallas.

Asia is especially exposed: More than 80% of the oil and LNG that passes through the Strait of Hormuz is headed there.

In the Philippines, government offices are now open just four days a week and bureaucrats must limit the use of air conditioning to nothing cooler than 75°F (24°C). In Thailand, public workers have been told to take the stairs instead of elevators.

India is the world’s second-biggest importer of liquefied petroleum gas, which is used in cooking. The Indian government is giving households priority over businesses as it allocates its limited supply and absorbing most of the price increases to keep costs low for poor families.

But LPG shortages have forced some eateries to shorten hours, close temporarily or drop dishes like curries and deep-fried snacks requiring a lot of energy.

South Korea, dependent on energy imports, is restricting the use of cars by public employees and has reinstated fuel price caps that had been dropped in the 1990s.

Crisis hits a vulnerable US economy

The United States, the world’s largest economy, is somewhat insulated.

America is an oil exporter, so its energy companies stand to benefit from higher prices. And LNG prices are lower in the US than elsewhere because its export liquefaction facilities already are running at 100% capacity. The US can’t export any more LNG than it already is, so gas stays home, keeping domestic supplies abundant and prices stable.

Still, higher gasoline prices are weighing on American consumers already frustrated by the high cost of living. According to AAA, the average price of a gallon of gasoline has risen to nearly $4 a gallon from $2.98 a month ago.

“Nothing weighs more heavily on consumers’ collective psyche than having to pay more at the pump,” Mark Zandi, chief economist at Moody’s Analytics, and his colleagues wrote in a commentary.

The US economy already was showing signs of weakness, expanding an annual pace of just 0.7% from October through December, down from a rollicking 4.4% from July through September. Employers unexpectedly cut 92,000 jobs in February and added just 9,700 a month in 2025, the weakest hiring outside a recession since 2002.

Gregory Daco, chief economist at EY-Parthenon, has raised the odds of a US recession over the next year to 40%. The risk when times are "normal'' is just 15%.

Recovery will take time

The world economy has proven resilient in the face of repeated shocks: a pandemic, Russia’s invasion of Ukraine, resurgent inflation and the high interest rates needed to bring it under control.

So there was optimism it also could shrug off the damage from the Iran war. But those hopes are fading as the threats to the Gulf's energy infrastructure continue.

“There is no economic upside to the conflict with Iran,” Zandi and his colleagues wrote. "At this point, the questions are how much longer the hostilities will continue and how much economic damage they will cause.”

Business

Two India-bound LPG Tankers Crossing Strait of Hormuz Out of Gulf

An oil tanker crossing the Strait of Hormuz (Reuters)
An oil tanker crossing the Strait of Hormuz (Reuters)
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Two India-bound LPG Tankers Crossing Strait of Hormuz Out of Gulf

An oil tanker crossing the Strait of Hormuz (Reuters)
An oil tanker crossing the Strait of Hormuz (Reuters)

Two liquefied petroleum gas tankers, BW Elm and BW Tyr, are crossing the Strait of Hormuz bound for India, according to ship tracking data from LSEG and Kpler.

The US-Israeli war against Iran has all but halted shipping through the strait, but Iran said this week that "non-hostile vessels" may transit the waterway if they coordinate with Iranian authorities.

The two India-flagged vessels have ⁠crossed the Gulf ⁠area and are in the eastern Strait of Hormuz, the data showed, according to Reuters.

India is gradually moving its stranded LPG cargoes out from the strait, with four LPG tankers moved so far - Shivalik, Nanda Devi, ⁠Pine Gas, and Jag Vasant.

As of Friday, 20 Indian-flagged ships including five LPG carriers were stranded in the Gulf, Rajesh Kumar Sinha, special secretary in the federal shipping ministry, said.

LPG carriers Jag Vikram, Green Asha and Green Sanvi are still in the western Strait of Hormuz, LSEG data show.

India, the world's second-largest LPG importer, is ⁠battling its ⁠worst gas crisis in decades, with the government cutting supplies for industries to shield households from any shortage of cooking gas.

The country consumed 33.15 million metric tons of LPG, or cooking gas, last year, with imports accounting for about 60% of demand. About 90% of those imports came from the Middle East.

India is also loading LPG onto its empty vessels stranded in the Gulf.