United States (U.S.) President Donald Trump exempted on March 6 Mexican and Canadian goods covered by the North American trade agreement known as USMCA (United States-Mexico-Canada Agreement) from his 25% tariffs for another month.

Trump has insisted on using tariffs to curb the flow of fentanyl and illegal immigrants into the U.S. and resolve trade deficits with other countries. He said that he still plans to impose "reciprocal" tariffs and sector-specific duties against countries around the world starting April 2.

In the meantime, according to the various orders signed by Trump, imports from Mexico that adhere to the 2020 USMCA trade agreement will be exempt from the 25% tariffs for one month.

Canadian autos that meet the trade deal requirements will also evade the 25% tariffs for one month, while the potash imported from Canada by U.S. farmers will incur a 10% tariff.

The White House estimates that 62% of Canadian imports will still be subject to the tariffs. Most of these are energy products, which are being tariffed at a 10% rate, and half are goods coming from Mexico. 

"Today, President Donald J. Trump announced adjustments to tariffs imposed on imports from Canada and Mexico in recognition of the structure of the automotive supply chain that strives to bring production into America," the White House said.

It added that duties imposed are now "25% tariffs on goods that do not satisfy USMCA rules of origin; a lower 10% tariff on those energy products imported from Canada that fall outside the USMCA preference; a lower 10% tariff on any potash imported from Canada and Mexico that falls outside the USMCA preference; and no tariffs on those goods from Canada and Mexico that claim and qualify for USMCA preference."

However, Trump warned that the relief for automakers would be short-lived and said he would not sign another extension next month.

In addition to Canada and Mexico, Trump also announced a 10% increase in tariffs on China, raising the total tariffs imposed on its largest trading partner to 20% due to its alleged role in fentanyl production.

The fluctuating tariff threats from the U.S. have roiled financial markets, raised business uncertainty worldwide, and triggered promises of countermeasures from China, Mexico, and Canada. 

Mexico President Claudia Sheinbaum has planned to announce any retaliatory measures on March 9. Prime Minister Justin Trudeau said Canada would impose 25% tariffs on US$30 billion of US goods starting March 4, and an additional US$125 billion of US goods in three weeks' time. 

China is also eyeing retaliatory tariffs, reportedly targeting America's agricultural and food sectors in retaliation for the U.S. President's latest hike on Chinese imports.

Trump said the tariff paused for Canada and Mexico is due to progress on illegal immigration and drug smuggling.