When the United States signed a free-trade agreement with Canada and Mexico more than 30 years ago, the premise was that partnering with two other thriving economies would also benefit America.
This week, President Trump abruptly scrapped that idea. He imposed a sweeping 25 percent tariff on Tuesday on the roughly $1 trillion of imports that Mexico and Canada send into the United States each year as part of that North American trade pact — before quickly walking them back. On Thursday, the president signed executive orders that paused the tariffs on Canada and Mexico for a period of one month for goods that trade under the rules of the U.S.-Mexico-Canada Agreement, which is most trade in North America.
It’s not yet clear what will happen after that. But if the tariffs go into effect, they are expected to significantly raise costs for Canadian and Mexican exports, undermining their economies and likely tipping them into recession.
