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US, Mexico, and Canada Reach Tentative Tariff Agreement
The US, Mexico, and Canada have agreed to a 30-day pause on tariff threats, averting a potentially devastating trade war.
UNITED STATES 07.10.2020 Photo by Michael Dougherty U.S. Southern Command
In a surprise move, the United States, Mexico, and Canada have agreed to a 30-day pause on tariff threats, averting a potentially devastating trade war. The agreement, announced on Monday, follows a tumultuous few days of negotiations between the three nations.
According to the agreement, the US will pause its planned tariffs on Mexican and Canadian imports, while the two countries take steps to address US concerns about border security and drug trafficking. Mexico has agreed to reinforce its border with 10,000 members of its National Guard, while Canada has pledged to name a fentanyl czar and list Mexican cartels as terrorist groups.
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The pause provides a temporary reprieve from the tariffs, which were set to go into effect on Tuesday. The tariffs would have imposed a 25% tax on imports from Mexico and Canada, with an additional 10% tax on Canadian oil, natural gas, and electricity.
The agreement was reached after a series of tense negotiations between US President Donald Trump and his Mexican and Canadian counterparts. Trump had threatened to impose the tariffs unless the two countries took steps to address US concerns about border security and drug trafficking.
While the agreement provides a temporary reprieve, it is unclear whether a permanent solution can be reached. Trump has indicated that he may still impose tariffs on China and the European Union, and has suggested that he may use tariffs as a tool to negotiate future trade agreements.
The impact of the tariffs on the global economy remains unclear, but many analysts have warned that they could lead to higher prices, reduced economic growth, and even recession.
