President Donald Trump on Monday delayed his planned tariffs on Canada and Mexico for 30 days after winning concessions from both countries to stem the flow of drugs and migrants into the United States, postponing, at least temporarily, a painful and potentially destabilizing trade war.

Tariffs of 10% are still set to go into effect on China on Tuesday morning. Trump said Monday that he was likely to talk with President Xi Jinping of China within the next 24 hours about a variety of contentious issues, and warned that the 10% tariff he has planned to impose was just an “opening salvo.”

The chaotic last-minute maneuvering demonstrated Trump’s willingness to use tariffs as leverage against America’s most important trading partners despite the potential for severe economic consequences. Imports from Mexico, China and Canada account for more than one-third of the products brought into the United States, more than $1 trillion in goods a year. Economists projected that the tariffs and the anticipated retaliatory measures could fan inflation and disrupt global supply chains.

Stock markets tumbled Monday morning before Trump announced that he had reached an agreement with Mexico’s president, Claudia Sheinbaum, to forestall the 25% levies. Trump also said that his initial call with Canada’s prime minister, Justin Trudeau, was “pretty good,” and that the two would speak later in the day.

Canada

That second call helped America avert tariffs with one of its closest allies, with Trump agreeing to a 30-day delay.

Hours after listing a litany of complaints about Canada, Trump posted on social media that Canada had agreed to many of his demands.

“I just had a good call with President Trump,” Trudeau said in a social media post. He said Canada would push ahead with its $1 billion border reinforcement plan, which had been previously announced.

“Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering,” Trudeau wrote on the social media platform X.

Trudeau added that he also signed a new intelligence directive on organized crime and fentanyl that would be backed with $200 million. He said that the tariffs would be paused for “at least 30 days” while the two countries continued to discuss the situation

Mexico

On Monday morning, Trump said that he had made a breakthrough with Sheinbaum.

Mexico agreed to deploy 10,000 additional troops who would be designated to stop the flow of migrants and illegal drugs across the U.S.-Mexico border. Sheinbaum said the United States would help to stanch the movement of guns over the border to Mexico.

Top officials from both countries are expected to engage in further talks over the next month.

“There is a relationship of respect and of equals, which is what is important,” Sheinbaum said.

Wild weekend

The decisions by Canada and Mexico to accede to Trump’s demands are likely to embolden a president who has already made clear that he sees tariffs as a source of leverage with adversaries and allies alike.

“Tariffs are very powerful, both economically and in getting everything else you want,” Trump said Monday. “When you’re the pot of gold, the tariffs are very good, they’re very powerful and they’re going to make our country very rich again.”

Over the weekend, Trump signed executive orders approving tariffs on Canada, Mexico and China. The levies of 25% on Canada and Mexico were set go into effect just after midnight Tuesday.

The orders set in motion a scramble by Canadian and Mexican leaders to avert a trade war that had the potential to destabilize the international trading system and throw their economies into recession.

The Trump administration justified the tariffs on the basis of national security, arguing that Canada, Mexico and China were allowing fentanyl to enter the United States and kill Americans. Trump has also pressured Mexico to take steps to prevent migrants from illegally entering the country.

Speaking at an event Monday, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, warned that businesses in his district were planning on passing “100%” of the costs of higher tariffs onto their customers. Bostic said whether or not businesses would be able to do so over an extended period would depend in large part on whether consumers “rebel” and that the answer would vary by product and sector.

In an interview with CNBC on Monday, the president of the Federal Reserve Bank of Boston, Susan Collins, said that “broad-based” tariffs would not only increase prices in so-called final goods, or items ready to sold to consumers, but also “intermediate goods” that are used to make other products.

China

China was also preparing its response. Its ambassador to the United Nations, Fu Cong, said Monday that China was filing a complaint with the World Trade Organization over Trump’s tariffs and would consider retaliatory action.

“We are firmly opposed to this unwarranted increase. We do believe this is in violation of WTO rules. That’s why China is filing a complaint at WTO, and we may be forced to take countermeasures. There is no winner in a trade war,” he said.

Ecuador adds tariffs

Ecuador’s conservative president said Monday that he is raising tariffs on Mexican imports in a move that echoes the trade barriers that Trump announced and paused against Mexico.

Ecuadorian President Daniel Noboa said Monday that the 27% tariff to be applied on Mexican goods was aimed at boosting local manufacturers. But the conservative leader may also be seeking favor with Washington.

Noboa, who took time away from a re-election campaign to attend Trump’s inauguration last month in Washington, has hailed Trump’s win as a victory for Latin America.

Ecuador’s announcement comes amid the South American country’s separate and bitter diplomatic dispute with Mexico, which last year severed diplomatic ties after Ecuadorian police broke into the Mexican Embassy to arrest Ecuador’s former Vice President Jorge Glas.

Ecuador’s move was widely condemned as a breach of international law, while Ecuador said that Glas was wanted for fraud and not for political reasons and accused Mexico of illegitimately granting him political asylum at the diplomatic compound.

Trade between the two countries is minimal, however, accounting for less than 1% of Mexico’s total exports, according to Mexican central bank data.

This report includes information from the Associated Press.