Donald Trump made a sudden U-turn on tariffs on Thursday as the stock market tumbled amid fears over his punitive taxes on Mexico and Canada.
The reversal came just as the markets dropped for the third day in a row—the result of Wall Street jitters that threaten to overshadow Trump’s efforts to bully America’s neighbors.
With the S&P 500 nearly 2% lower, new economic data was alarming investors ahead of Friday’s monthly jobs report.
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A sharp sell-off sent the Nasdaq Composite sliding 2.6% and the Dow Jones Industrial Average was down 1%, making it the worst day for trading this year.
Now, Trump appears to be stepping back from the edge in his game of brinkmanship with the North American economy.
Speaking in the Oval Office, where he signed executive orders authorizing the pause, the president said he was granting a stay of execution allowing both countries to avoid tariffs on most exports to the United States for one month.
The reversal comes a day after he gave a 30-day reprieve on the 25% tariffs to automakers.
But Trump refused to admit he was spooked by the financial downturn.
As he signed off on a second one-month suspension of tariffs on Mexico and Canada, a reporter asked if the tanking stock market influenced his decision.
The president was asked: “Some of these exemptions that have been announced and some of these temporary delays, have you been influenced in those decisions because of the market reaction?”
“Well, there were no delays at all, no nothing to do with the market. I’m not even looking at the market,” he replied.
He refused to concede the adverse reaction on Wall Street, continuing: “Because in the long term, the United States will be very strong with what’s happening now. These are countries and companies, foreign companies, that have been ripping us off, and no president did anything about it until I came along, and then I did a lot about it.”
He claimed the markers were in good stead during his first term until the pandemic hit.
“When COVID came along, we had a focus on COVID. We did a great job. We got rid of that. We ended up handing over with a market that was higher than it was previous to COVID coming in,” he claimed.
“But this is very much about companies and countries that have ripped off this country, our country, our beloved USA, and they’re not going to be ripping us off anymore. So I think that has an impact on them,” he added.
“A lot of them are globalist countries and companies that won’t be doing as well because we’re taking back things that have been taken from us, many years ago,” Trump added.
He admitted there would be “disruption”–a warning he made in his speech to the joint session of Congress on Tuesday.
He signaled his intentions on Truth Social earlier in the day in regard to Mexico, but he left Canada hanging until he revealed his intentions in the Oval Office.
“I spoke to the President of Mexico, a wonderful woman today, and we helped them out with the problems that we’re having, having to do with the tariffs, short-term tariffs. And we had a very good conversation. Also, we discussed drugs, and they were working much harder,” he added.
Mexican President Claudia Sheinbaum posted her thanks on social media, saying: “We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results.”
Trump’s advisors claim his tariff plan will not raise inflation but, speaking to the Economic Club of New York on Thursday, Treasury Secretary Scott Bessent said: “Can tariffs be a one-time price adjustment? Yes.”
The surprise move came after another slap down from the courts over DOGE’s cost-cutting efforts, with a judge refusing to back down from a decision ordering the administration to unfreeze money owed for foreign aid projects.
Trump also met with his Cabinet on Thursday for a second time and assured them they have the authority to hire and fire employees at their respective agencies—and not Elon Musk.”
“I want the Cabinet members, go first, keep all the people you want. Everybody that you need,” Trump told reporters later in the Oval Office.
But he also let them know that Musk reserves the power of the chainsaw.
“I want them to do the best job they can, when we have good people that’s precious, that’s very important and we want them to keep the good people,” Trump said he told his top administration officials.
“So, we’re going to be watching them. Elon and the group are going to be watching them. If they can cut, it’s better. And if they don’t cut, then Elon will do the cutting.”
