U.S. President Donald Trump announced on March 6 that he would delay for about a month a significant portion of his 25% tariff plan imposed on Mexico and Canada. On March 5, just a day after imposing the tariffs on these two nations, he stated that the tariff on cars and related car parts would be delayed for a month, and the scope of tariff deferral was also significantly expanded on the same day. It is interpreted as an attempt to adjust the pace amid concerns that his ‘comprehensive tariff bomb’ could deal a significant blow to the U.S. auto industry and drive up inflation.
Trump signed his executive order at the White House on the 6th, stipulating that the import items covered by the United States-Mexico-Canada Agreement (USMCA) will be exempt from tariffs until April 2. He explained reasons for the delay to the press, noting that he does not want any harm to American people, especially tariff disrupting the American carmakers.
However, Trump stressed that the deferral is temporary and there will be no delay after April 2, 2025, when the tariff will take effect. He noted that most of the tariffs would start taking effect on April 2, and the main ones would be reciprocal in nature. As reiterated often times, he made it clear that there will be additional 'reciprocal' tariffs to the current universal tariffs.
When asked whether the deferral reflects a negative response from the market, Trump replied that it has nothing to do with the market and that he does not even look at the market. U.S. Treasury Secretary Scott Bessent also denied the potential risk of Trump's tariff plan pushing up the inflation. Bessent stated that the U.S. will react only as long as the practices of another nation harm the U.S. economy and its people, further adding that it would be the trade policy putting America first. He is widely believed to have suggested the U.S. will respond with higher tariffs if other nations retaliate against U.S. tariffs.
Upon the remarks, International Monetary Fund spokesperson Julie Kozack demonstrated concerns that the Trump administration is escalating U.S. financial market volatility and uncertainty with tariffs against its key trading partners, including Canada, Mexico, and China. CNN also criticized that Trump's inconsistent approach surrounding tariffs is causing chaos.
China's Foreign Affairs Commission Director Wang Yi warned of a possible retaliatory tariffs at a press conference on foreign affairs on March 7, stating that China will firmly retaliate against oppression. Directly targeting the U.S., Yi noted that a country with power should not rely on its own strength to bully the weak and that the U.S. gained nothing from the tariff war it triggered.
Jin-Woo Shin niceshin@donga.com