AILSA CHANG, HOST:
All right, break out the margaritas or the Canadian whiskey. A threatened tax on imports from Mexico and Canada is on hold, at least for now. President Trump agreed to suspend the tariffs for at least one month after his counterparts promised new measures to safeguard their borders to the north and south of the U.S. Trump is still threatening a 10% tariff on imports from China. But the prospect of a wider trade war has drawn stiff opposition from U.S. business groups. NPR's Scott Horsley joins us now. Hi, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ailsa.
CHANG: OK, so all of these tariffs were set to take effect tomorrow, right? But Trump has offered a temporary reprieve, at least when it comes to Mexico and Canada. Everything's happened so fast. Can you just, like, bring us up to speed here?
HORSLEY: Sure. Trump was pleased that Mexico agreed to send National Guard troops to help police the Southern border. Canada is also taking some steps to ostensibly curb the flow of illegal fentanyl and immigration, which was Trump's stated rationale for these tariffs. Beyond those concessions - if you want to call him that - the president also got a pretty strong signal from the stock market this morning that investors didn't like the idea of launching a trade war against the country's next-door neighbors who are also the United States' biggest trading partners.
CHANG: Yeah.
HORSLEY: The Dow Jones Industrial Average tumbled more than 600 points in the first half hour of trading this morning. And Matthew Martin of Oxford Economics says, that's the kind of thing that gets Trump's attention.
MATTHEW MARTIN: Trump uses the equity markets as kind of a guidepost of, are his policies working? In this case, we don't think equity markets would really like 25% tariffs on Canada and Mexico. This might just be more of a negotiation tactic.
HORSLEY: The stocks largely rebounded once it became evident that a deal to suspend the tariffs was in the works. The president also got an earful from industry groups who warned that tariffs would drive up prices in the U.S. and invite retaliation that could hurt U.S. exporters. You know, over the weekend, the powerful business lobby, the Chamber of Commerce, along with the National Association of Manufacturers and the Farm Bureau Federation, all came out strongly against these import taxes.
CHANG: Well, just how worried were those businesses? Did they think it was a bluff, maybe?
HORSLEY: Well, they were worried that the tariffs would have ended decades of free trade in North America. You know, I talked to a farmer this morning in northeastern Iowa - a state that Trump carried handily back in November. Bob Hemesath worried that if tariffs had taken effect, he would have had to pay more for the fertilizer he imports from Canada and also lost sales. You know, he notes the last time Trump launched a trade war, China pretty much stopped buying corn and hogs from the U.S.
BOB HEMESATH: They went to South America, to Brazil and Argentina. And once you lose those markets - those export markets - as a supplier or an exporter, it's awful hard to get them back.
HORSLEY: So there's a lot of relief that the tariffs on imports from Mexico and Canada have been paused, at least temporarily. Of course, we're still going to have uncertainty for the next 30 days. But at least for now, North America remains a free trade zone.
CHANG: For now. That is NPR's Scott Horsley. Thank you so much, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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