Just two days after announcing sweeping sanctions of 25% on almost all Canadian imports as well as all Mexican imports, President Trump promised to pause the implementation of the levies for 30 days following urgent talks with the leaders of the two countries.
Oil markets reacted, with WTI dropping 3.3% and Brent falling 2.3%. Natural gas prices also fell significantly, shedding 5.2% in early trading.
The talks, according to a Reuters report, resulted in commitments by both Canada and Mexico to boost border controls, including deploying more personnel to stem the flow of migrants and stepping up drug traffic control measures. “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, adding that he planned to negotiate new trade deals with both Canada and Mexico over the next 30 days. Canada is the biggest supplier of heavy crude to American refiners, exporting it at a rate of close to 4 million barrels daily, which makes it the biggest exporter of crude oil to the U.S. in general. Mexican crude oil exports north of the border are much smaller, at less than half a million barrels daily, but they still comprise the second-largest share of foreign oil in U.S. refiners’ mix. That fact may have played a role in Trump’s willingness to negotiate new trade deals quickly before the tariffs kick in and retaliation begins.