US President Donald Trump announced on Thursday that he has agreed with Mexican President Claudia Sheinbaum to extend their current trade deal for 90 days while they negotiate a new trade deal.

Trump wrote on his TruthSocial platform that the current trade deal calls for Mexico continuing to pay “25% Fentanyl Tariff, 25% Tariff on Cars, and 50% Tariff on Steel, Aluminum, and Copper.” Trump added that “Mexico has agreed to immediately terminate its Non Tariff Trade Barriers.”

Sheinbaum stated on X that they avoided Trump’s tariff increase, issued by executive order on the same day, and gained 90 days to build a long-term agreement through dialogue.

Trump’s executive order imposes an increase in tariff rates on 69 foreign jurisdictions and goes into effect on August 7. Most of the tariff increases range from 15 percent to 25 percent.

When issuing the executive order, Trump stated:

I have received additional information and recommendations from various senior officials on, among other things, the continued lack of reciprocity in our bilateral trade relationships and the impact of foreign trading partners’ disparate tariff rates and non-tariff barriers on U.S. exports, the domestic manufacturing base, critical supply chains, and the defense industrial base.

He added that he received information and recommendations on “the status of trade negotiations, efforts to retaliate against the United States for [its trade policy], and efforts to align with the United States on economic and national security matters.”

The order additionally increases the tariffs of all countries not listed in the order by 10 percent. It further imposes an additional 40 percent rate on shipments that US Customs and Border Protection (CBP) has determined to have been transshipped to circumvent the order. The order states, “The Secretary of Commerce and the Secretary of Homeland Security, acting through the Commissioner of CBP, in consultation with the United States Trade Representative, shall publish every 6 months a list of countries and specific facilities used in circumvention schemes.”

Trump increased tariffs on Canada from 25 to 35 percent on the basis of major drug trafficking across the US-Canadian border and Canada’s retaliatory efforts against the US’s previous 25 percent tariff.

Trump set extensive tariff increases on April 2, which he called “Liberation Day.” The tariffs were set to take effect on April 9. However, he extended the deadline a week later to July 9 in response to more than 75 Ccuntries having called US officials to negotiate trade deals without any retaliation against the US. Trump found it necessary to extend the deadline to August 1 for further negotiations.

The constitutionality of Trump’s tariffs is being challenged in the US Court of Appeals for the Federal Circuit, with arguments heard on Thursday.