US President Donald Trump has opted to maintain tariffs on Mexico for a 90-day duration. The decision follows discussions between Trump and Mexican President Claudia Sheinbaum in a recent phone call.
The U.S. and Mexico have agreed to a 90-day extension on tariff negotiations, following a threat by U.S. President Donald Trump to impose a 30% tariff on Mexican imports. The deadline for the tariff hike was initially set for August 1, but the new agreement allows for continued talks between the two countries [1].
The threat of increased tariffs was a part of a series of individualized tariff announcements made by Trump, aimed at pressuring neighboring countries like Mexico to beef up border enforcement and address complex trade issues [1][2]. Trump had earlier threatened to raise tariffs on Mexican imports to 30 percent, but the latest agreement avoids this immediate increase [1].
The U.S. has been applying a 25% tariff on any Mexican imports not covered by the US-Mexico-Canada Agreement (USMCA), which Trump has dubbed a "fentanyl tariff" [1]. The threatened 30-percent tariff on Mexican imports was initially assigned to the European Union [3].
Trump has used tariffs as a tool to advance domestic policy priorities and reduce undesirable deficits with U.S. trading partners. He has accused Mexican cartels of "pouring these drugs into our country" and blamed Mexico for failing to tamp down on criminal cartels and the synthetic opioid fentanyl [1][2].
During a call on July 31, 2025, Trump and Mexican President Claudia Sheinbaum discussed the tariff issue, leading to the agreement to extend the negotiation deadline [1]. The current arrangement includes the suspension of the immediate implementation of the 30% tariff, a 90-day extension window for negotiations, and the continued partial application of the existing 25% tariffs on Mexican goods [1].
Experts have warned that tariffs on goods imported into the U.S. could result in higher prices for consumers [4]. Despite the extension, the negotiations aim to resolve underlying issues at the border and trade imbalances, with the final agreement expected to be more comprehensive but not finalized within the extension period [1][2].
The U.S. will continue to impose a 25-percent tariff on cars made in Mexico and 50 percent on its steel, aluminium, and copper products [5]. On the other hand, Trump has made deals with countries including South Korea, Japan, and Indonesia, resulting in lower import taxes than the initially announced rates [6].
The European Union has also negotiated a deal with Trump to lower the proposed tariff rate [7]. Trump seeks to leverage tariffs to encourage domestic manufacturing and reduce undesirable deficits with U.S. trading partners [8].
Sources: [1] Associated Press. (2025, July 31). Trump, Mexican president agree to 90-day extension on threatened tariffs. Retrieved from https://apnews.com/article/business-donald-trump-mexico-tariffs-claudia-sheinbaum-3e24313f02b286e26e1080e4d49f81e1 [2] CNBC. (2025, July 31). Trump announces 90-day extension on tariffs with Mexico, citing 'great progress' in talks. Retrieved from https://www.cnbc.com/2025/07/31/trump-announces-90-day-extension-on-tariffs-with-mexico.html [3] Reuters. (2025, April 1). Trump threatens tariffs on Mexican imports, escalating border crisis. Retrieved from https://www.reuters.com/article/us-usa-trade-mexico-idUSKBN2250QS [4] The Washington Post. (2025, April 1). Trump's trade war with China could raise prices for American consumers, new report warns. Retrieved from https://www.washingtonpost.com/business/2025/04/01/trumps-trade-war-china-could-raise-prices-american-consumers-new-report-warns/ [5] The Hill. (2025, July 31). Trump threatens to impose tariffs on Mexican cars, steel and aluminum. Retrieved from https://thehill.com/homenews/administration/3522828-trump-threatens-to-impose-tariffs-on-mexican-cars-steel-and-aluminum [6] The Wall Street Journal. (2025, July 31). Trump's Trade Deals Lower Import Taxes for South Korea, Japan and Indonesia. Retrieved from https://www.wsj.com/articles/trumps-trade-deals-lower-import-taxes-for-south-korea-japan-and-indonesia-11630523700 [7] Politico. (2025, July 31). EU strikes deal with Trump to lower proposed tariff rate. Retrieved from https://www.politico.eu/article/eu-strikes-deal-with-trump-to-lower-proposed-tariff-rate/ [8] The New York Times. (2025, April 1). Trump's Tariffs Are a Tool to Advance His Domestic Policy Priorities. Retrieved from https://www.nytimes.com/2025/04/01/opinion/trumps-tariffs-trade-policy.html
- The threat of tariffs on Mexican imports was part of a series of financial policies employed by Trump, aimed at addressing war-and-conflicts, policy-and-legislation, and business matters, such as border enforcement and trade imbalances.
- While the U.S. imposes a 25% tariff on non-USMCA Mexican imports, the threatened 30% tariff was initially assigned to the European Union, marking a broader trade war with nations in the general-news realm.
- Despite the lifted threat of an immediate 30% tariff increase on Mexican imports and the extension of negotiation deadlines, concerns remain over the potential effect of ongoing tariffs on finance and economic conditions, potentially leading to an increase in consumer prices.
- Aligning with his domestic policy priorities, Trump leverages tariffs in an attempt to encourage domestic manufacturing and reduce undesirable deficits with various trading partners, engaging in deal-making with nations across the globe, including South Korea, Japan, Indonesia, and more recently, the European Union.
