The tariffs will be paused until April. (AP: Paul Sancya)
In short:
Donald Trump has again delayed 25 per cent tariffs for some goods from Canada and Mexico.
Goods that are compliant with a North American trade agreement will be exempt from the tariffs, which were imposed this week.
What's next?
The exemption, covering the two largest US trading partners, will expire on April 2.
US President Donald Trump has delayed 25 per cent tariffs for some imports from Canada and Mexico, amid fears of the economic fallout from an escalating trade war.
The tariffs Mr Trump imposed this week were the latest twist in fast-shifting trade policy that has unnerved financial markets and business leaders.
The exemption, covering the US's two largest trading partners, will expire on April 2, when Mr Trump is threatening to impose a regime of "reciprocal tariffs" on all US trading partners.
It is the second time the US president has postponed the tariffs since he first unveiled the import taxes in early February.
The reprieve will apply to goods from Canada and Mexico that are compliant with a North American trade pact, which the three countries negotiated during Mr Trump's first term.
That means almost two-thirds of imports from Canada would likely still face the new tariffs, because they're not compliant with the pact, according to a White House official. He said about half the imports from Mexico would be exempt.
President Trump has delayed the tariffs on Canada and Mexico for the second time. (AP: Ben Curtis)
Mr Trump has said the tariffs are designed to pressure the US's neighbours to stem the smuggling of fentanyl across their borders.
He initially only announced a reprieve for Mexico, but later amended the tariffs order to include Canada.
"After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay tariffs on anything that falls under the USMCA agreement," Mr Trump said on his Truth Social platform.
"I did this as an accommodation, and out of respect for president Sheinbaum," he wrote.
"Our relationship has been a very good one, and we are working hard, together, on the border."
Ms Sheinbaum said she and Mr Trump "had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results", on a post on the social media platform X, formerly Twitter.
At a press conference, the Mexican president elaborated on her call with Mr Trump on Thursday, saying that she told the president that Mexico was making great strides in fulfilling his security demands.
Earlier, Canadian Prime Minister Justin Trudeau said he had a "colourful" call with Mr Trump, but he expected a trade war to continue "for the foreseeable future".
The vast majority of fentanyl comes into the US via Mexico, and a relatively minuscule amount enters from Canada, official figures show.
Mr Trudeau has accused Mr Trump of using tariffs to weaken the Canadian economy. Canada had imposed retaliatory tariffs on US imports, but they have now also been delayed.
From January to February, the amount of fentanyl seized at the US-Mexico border dropped more than 41 per cent, according to Ms Sheinbaum, citing data from US Customs and Border Protection.
ABC/Reuters/AP