U.S. President Donald Trump and Mexican President Claudia Sheinbaum have decided to postpone planned tariffs for a month to allow for further negotiations. Mexico has committed to deploying 10,000 national guard members to combat drug trafficking, a move that was announced after a “very friendly conversation” between the two leaders. The talks will be led by top U.S. officials, including Secretary of State Marco Rubio and Secretary of Treasury Scott Bessent. Mexico’s conditions for the negotiations include changes in border policies, with a focus on stopping drug trafficking to the U.S. and preventing the flow of high-powered weapons to Mexico.

Despite the temporary hold on tariffs with Mexico, uncertainty looms over Trump’s tariffs against Canada and China, set to take effect soon. The situation has sparked concerns about a potential trade war, as Trump has hinted at more import taxes in the future. Financial markets are bracing for the impact of the tariffs, with stock markets showing a modest selloff.

While the U.S. government insists that the situation is not a trade war but a “drug war,” critics warn of the economic repercussions. Economists fear that the tariffs could lead to price hikes, hinder growth, and raise borrowing costs for the government. Despite Trump’s emphasis on addressing illegal drugs, his tariff policies have broader implications for trade relations and economic stability, with potential consequences for inflation and interest rates. As negotiations unfold and tensions persist, the global economy remains on edge, awaiting the outcomes of these high-stakes trade discussions.