US President Donald Trump’s unpredictable approach to tariffs has left allies and investors alike feeling uncertain. In a series of back-and-forth communications with Mexico and Canada, Trump delayed most tariffs on goods from these countries until April 2. The announcement came after a phone call with Mexican President Andres Manuel Lopez Obrador, during which Trump characterized the deal as a “short-term” arrangement.
The news sent markets into a tailspin, with the S&P 500 declining 1.8 percent, bringing the week’s decline to 3.6 percent. Investors are growing weary of the tariff fluctuations, which have wiped out virtually all gains since Trump took office in November.
Canada, a key ally, is not immune to the fallout. The country shares intelligence with the US through NORAD and is part of the “Five Eyes” club, sharing secrets gathered around the world. However, tensions between Trump and Canadian Prime Minister Justin Trudeau are running high, with Trudeau accusing Trump of trying to collapse Canada’s economy in order to annex it.
In contrast, Mexican President Claudia Sheinbaum has taken a more conciliatory approach, praising her conversation with Trump as “excellent” and “respectful.” French President Emmanuel Macron has also sought to maintain a positive tone, laying out his differences with Trump while still seeking to build a relationship.
Trump’s impulsive approach to tariffs is causing concern among analysts, who argue that it undermines the US’s credibility on trade. As one analyst noted, “25% tariffs on closest allies: crazy” – a sentiment echoed by many others in the international community.
Source: https://www.nytimes.com/2025/03/06/us/politics/tariffs-trump-mexico-canada-stock-market.html