U.S. President Donald Trump has paused new tariffs on Mexico for one month after Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal drugs, particularly fentanyl, The White House quoted on Monday.

Mexican President, Claudia Sheinbaum shared on X, “The agreement also includes a U.S. commitment to act to prevent trafficking of high-powered weapons to Mexico”. This move came after both the leaders spoke by phone on Monday, just hours before U.S. tariffs on Mexico, China and Canada were set to take effect. “I look forward to participating in those negotiations, with president Sheinbaum, as we attempt to achieve a deal between our two countries”, he wrote on truth social (app launched by president trump after he was banned by major social media sites). “We have this month to work and convince each other that this is the best way forward”, Sheinbaum said at a press conference.

How experts are seeing the tariff impose?

Experts are warning of inflammation and slower economic growth. Evidently the move has sparked worries about rising prices and potential Business interruptions throughout North America. Economists says, The U.S. leader’s plan to impose 25% tariffs on Canada and Mexico and 10% on China would slow global growth and drive prices higher for American residents.

The reaction of Financial Market reflected concerns about the fallout from a trade war. Shares in Tokyo ended the day down almost 3% and Australia’s Benchmark. As China market was shut for Lunar New Year holidays, a proxy trade for Chinese markets dropped 1.8%. The Chinese yuan, Canadian dollar and Mexican peso, all slumped against a soaring dollar, with Canada and Mexico the Vital sources of U.S. crude oil imports, U.S. oil prices jumped more than 1% while gasoline futures rose nearly 3%. “The newly elected U.S. president’s tariff policy cover almost half of U.S. imports and would require the United States to double its own manufacturing output to cover the gap” - ING analysis.

Other analysts said the tariff could throw Canada and Mexico into recession and trigger “stagflation” – term use for high inflation, stagnant growth and elevated unemployment.