Trump halts tariffs on Mexico and Canada, but not China
President Donald Trump
President Donald Trump
WASHINGTON (Reuters): U.S. President Donald Trump suspended his threat of steep tariffs on Mexico and Canada, agreeing to a 30-day pause.

He halted tariffs in return for concessions on border and crime enforcement with the two neighboring countries.

Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement efforts in response to Trump s demand to crack down on immigration and drug smuggling.

The United States also made a commitment to prevent trafficking of high-powered weapons to Mexico, Sheinbaum said.

"As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome," Trump said on social media.

The agreements forestall, for now, the onset of a trade war that economists predicted would damage the economies of all involved and usher in higher prices for consumers.

After speaking by phone with both leaders, Trump said he would try to negotiate economic agreements over the coming month with the two largest U.S. trading partners, whose economies have become tightly intertwined with the United States since a landmark free-trade deal was struck in the 1990s.

CHINA TARIFFS STILL PLANNED

No such deal has emerged for China, which faces across-the-board tariffs of 10% that began on Tuesday. A White House spokesperson said Trump would not be speaking with Chinese President Xi Jinping until later in the week.

Trump warned he might increase tariffs on Beijing further.

"China hopefully is going to stop sending us fentanyl, and if they are not, the tariffs are going to go substantially higher," he said.

China has called fentanyl America s problem and said it would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open for talks.

The latest twist in the saga sent the Canadian dollar soaring after slumping to its lowest in more than two decades. The news also gave U.S. stock index futures a lift after a day of losses on Wall Street.

EU leaders at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the U.S. imposes tariffs, but also called for reason and negotiation. The U.S. is the EU s largest trade and investment partner.

Trump hinted that Britain, which left the EU in 2020, might be spared tariffs.