President Trump Refrains from Imposing Tariffs, Instead Directs Agencies to Investigate Trade Deficits
President Donald Trump did not impose tariffs on U.S. imports from Canada and Mexico on Monday, despite previous promises, and instead directed federal agencies to investigate U.S. trade deficits, currency manipulation, and unfair trade practices.
According to a presidential memo, the Commerce, Treasury, and U.S. Trade Representative departments are tasked with evaluating the economic and security risks of trade deficits and proposing measures to remedy them. This development led to a rally in global stocks and a rise in other currencies against the dollar, as investors had anticipated immediate tariffs.
Trump expressed his consideration of a 25% tariff on imports from Canada and Mexico due to the alleged influx of illegal immigrants and fentanyl into the U.S. However, he did not immediately impose the tariffs, instead opting for a more measured approach.
The memo also directed the U.S. Trade Representative to evaluate China’s compliance with the 2020 “Phase 1” trade deal, which required Beijing to increase U.S. purchases by $200 billion over two years. The pandemic hindered China’s ability to meet those targets, and USTR will assess this and recommend actions, including tariffs, if necessary.
Additionally, Trump delayed the enforcement of a ban on TikTok but hinted at tariffs if Beijing failed to approve a U.S. deal for the app. The memo also called for public consultations to prepare for a 2026 review of the USMCA trade agreement and evaluate its impact on American stakeholders. Despite expectations of immediate tariff action, the president plans to coordinate with Congress on trade matters, with nominees for Commerce and Treasury set to advance his trade agenda soon.