US President Donald Trump gives Mexico 90-day tariff reprieve as talks continue, hours before Aug 1 deadline
The extension, which avoids a 30 per cent tariff on most Mexican non-automotive and non-metal goods compliant with the US-Mexico-Canada Agreement on trade, came after a Thursday morning call between Trump and Mexican President Claudia Sheinbaum.
'We avoided the tariff increase announced for tomorrow,' Sheinbaum wrote in an X social media post, adding that Mr Trump's call was 'very good.'
Approximately 85 per cent of Mexican exports comply with the rules of origin outlined in the USMCA, shielding them from 25 per cent tariffs related to fentanyl, according to Mexico's economy ministry.
Mr Trump said that the US would continue to levy a 50 per cent tariff on Mexican steel, aluminium and copper and a 25 per cent tariff on Mexican autos and on non-USMCA-compliant goods subject to tariffs related to the US fentanyl crisis.
'Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many,' Mr Trump said in a Truth Social post without providing details.
Mr Trump is expected to issue tariff rate proclamations later on Thursday for countries that have not struck trade deals by a 12.01am (local time) deadline.
'The rest of those countries that either do not have a deal or have a letter, they will be hearing from this administration by the midnight deadline tonight,' White House press secretary Karoline Leavitt told a news conference.
She said there could still be some deals cut before the deadline, adding: 'I do know foreign leaders are ringing his phone realising this deadline is a real thing for them tomorrow, and they're bringing offers to the table.'
South Korea agreed on Wednesday to accept a 15 per cent tariff on its exports to the US, including autos, down from a threatened 25 per cent, as part of a deal that includes a pledge to invest $US350 billion ($A544 billion) in US projects to be chosen by Mr Trump.
But goods from India appeared to be headed for a 25 per cent tariff after talks bogged down over access to India's agriculture sector, drawing a higher-rate threat from Mr Trump that also included an unspecified penalty for India's purchases of Russian oil.
Although negotiations with India were continuing, New Delhi vowed to protect the country's labour-intensive farm sector, triggering outrage from the opposition party and a slump in the rupee.
Mr Trump's rollout of higher import taxees on Friday will come amid more evidence they have begun driving up consumer goods prices.
Commerce Department data released Thursday showed prices for home furnishings and durable household equipment jumped 1.3 per cent in June, the biggest gain since March 2022, after increasing 0.6 per cent in May. Recreational goods and vehicles prices shot up 0.9 per cent, the most since February 2024, after being unchanged in May. Prices for clothing and footwear rose 0.4 per cent.
Mr Trump hit Brazil on Wednesday with a steep 50 per cent tariff as he escalated his fight with Latin America's largest economy over its prosecution of his friend and former President Jair Bolsonaro, but softened the blow by excluding sectors such as aircraft, energy and orange juice from heavier levies.
The run-up to Mr Trump's tariff deadline was unfolding as federal appeals court judges sharply questioned Mr Trump's use of a sweeping emergency powers law to justify his sweeping tariffs of up to 50 per cent on nearly all trading partners.
Mr Trump invoked the 1977 International Emergency Economic Powers Act to declare an emergency over the growing US trade deficit and impose his 'reciprocal' tariffs and a separate fentanyl emergency.
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