It's been a big day in US politics. Let's take a quick look at some of the major developments in this story:

• US President Donald Trump's proposed 25% tariffs on Canada and Mexico were paused on Monday, less than 24 hours before they were set to take effect
• The pause - which is scheduled to last for 30 days - came after multiple calls between Trump and Canada's Justin Trudeau and Mexico's Claudia Sheinbaum
• Both Mexico and Canada have agreed to ramp up border security to curb the flow of illegal immigration and drugs - priorities for Trump's White House
• Canada will appoint a "fentanyl tsar", and Mexico will send 10,000 troops to the border as part of the deal with Trump
• A 10% tariff increase on imports from China is still schedules to take effect at 00:01 EST (05:01 GMT)

Candace Laing, president and CEO of the Canadian Chamber of Commerce, says the current tariff pause will make space for much needed diplomacy.

"A 30-day delay means more time for Canadian businesses and governments to drive home the point that tariffs make no sense between the two closest allies the world has ever known," Laing tells the BBC.

Laing emphasises that a pause only provides temporary reassurance and that the looming tariff threat breeds "uncertainty" while leaving businesses and families "in the lurch".

"This is not a game we want to play when livelihoods depend on existing US relationships," Laing says, adding that $3.6bn (£2.9bn) "hangs in the balance" daily.

"We will not sleep easier until tariffs are taken off the table permanently."

Andrew Furey, the Premier of Newfoundland and Labrador, has told the BBC that all of Canada is breathing "a collective sigh of relief" now that Trump has delayed the tariffs.

But he warns that a trade war still looms and says Canadians should be prepared for whatever comes next from Trump, who he dubbed "irrational" and "chaotic".

"We're left as Canadians feeling a bit confused by this attack from our closest friend, our largest trading partner, our ally, family," he says.

He adds that Canadians share Trump's interest in a strong border and tackling the scourge of fentanyl. But they do not agree that disrupting the economies of both countries is the best way forward.

"There is significant resolve amongst Canadians," Furey says, "and we see this not just as an economic threat, but we see this as a potential threat to our sovereignty and to our values".

Did Trump's trade threats pay off?published at 01:28 Greenwich Mean Time

01:28 GMT

Courtney Subramanian
Reporting from Washington DC

Image source, EPA

President Trump's high-stakes confrontation with the US's closest trading partners appears to have paid off, with both Mexico and Canada agreeing to stricter border security and taking bigger steps to address fentanyl trafficking.

The strategy to leverage the US economy to force concessions from other countries notches a win for Trump's "America first" agenda, allowing him to follow through on core domestic issue without American consumers feeling the sting of the economic consequences of a continental trade war.

"Tariffs are very powerful, both economically and in getting everything else you want," he told reporters in the Oval Office on 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."

Trump's tariff playbook is hardly new. His tariffs on steel and aluminium during his first term prompted backlash from Mexico, Canada and the European Union, but economists say those measures were more limited in scope.

This time, Trump has promised sweeping tariffs on goods from Mexico, Canada and China - which is still set to see a 10 percent tariff increase on goods on Tuesday.

But today's wins may prove to be more damaging tomorrow.

It remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline is up, stirring fears of uncertainty that could lead businesses to reduce their reliance on American markets, hold off on investing in building new factories or hiring workers until the trade stand-off becomes more clear.

Jonathan Josephs
Business reporter

We’ve been telling you how economists consider tariffs to be inflationary – that they result in prices in shops going up.

Well, some of President Trump’s advisors believe that some of that can partially be offset by some of his other policies – cutting energy prices, in particular.

And to try and make that happen, the newly confirmed Interior Secretary Doug Burgum has signed a series of orders designed to “reduce living costs for American families”.

As well as looking at government policies, there’s also a lot in there, external about boosting energy production and bringing energy prices down. They’re also a major cost for many businesses.

These are much longer-term policies and it's far from clear if they will work.

Former head of the US Energy Information Administration Adam Seminski told me recently that many presidents have tried, but there is “no magic wand” to lower energy prices.

Tariffs on China are still expected to go into effect at 12:01EST Tuesday after Trump announced a 10% tariff on the country's imported goods over the weekend.

Tariffs that were scheduled to take effect on goods from Canada and Mexico were abruptly paused for at least 30 days after Trump held phone calls with the leaders of the two countries, which neighbour the US.

So far, there does not appear to have been any calls held between Trump and the Chinese leader on Monday, however Trump said he expected a call to take place "probably over the next 24 hours".

He described the 10% import tariff as the "opening salvo" and said that the tariffs could be "very, very substantial" if no agreement is made. Analysts interpreted Trump's comment to mean that the tariffs could go higher than 10%.

After announcing he would place tariffs on Canada and Mexico during his campaign, the president seemed to be following through.

It sent the world economy into a frenzy, and then President Donald Trump postponed his trade war with his North American neighbours after the countries agreed to measures to bolster border security.

But he still has China and the EU in his sights. Is the UK next on the list for the trade war? And how do tariffs work anyway?

Sarah and Justin join Matt Chorley to try and make sense of it all. They also discuss whether Trump’s staff might withhold information from him after his reaction to last week’s aviation collision, and if he might “pull a Liz Truss?”

• Listen here or wherever you get your podcasts.

The World Tonight

We've been hearing reaction from government and business officials who say the pause on tariffs is good news. But they have noted that it is only temporary.

Bill Hanvey is the president and CEO of the Auto Care Association - a US trade organisation which represents US manufacturers, distributers, and sellers of vehicle parts.

He tells The World Tonight's James Coomarasamy that the auto industry is relieved by the pause, but is keeping a careful watch on the very fluid situation.

He described auto manufacturing as a "global industry" and says that US distributors are not looking for other regions to produce car parts.

Former Canadian Foreign Minister Perrin Beatty calls the delay good news, but questions whether fentanyl is really the issue for Trump, or if the goalpost will continue to shift.

Beatty, who is also the former CEO of the Canadian Chamber of Commerce, also denied that Canada has capitulated to America's demands.

“It’s not folding, it makes sense for both countries,” he says of the deal struck between Trump and Trudeau.

Jonathan Josephs
Business reporter

The pause in US tariffs on Canada and Mexico might bring a sigh of relief from politicians, but it’s a bit more complicated for CEOs.

If there’s one thing the business world doesn’t like, it's uncertainty. And that was reflected by the sell-off in global stock markets on Monday.

The quick turnaround from President Trump shows that they can't be sure of what to expect for the next four years.

In recent years, many companies reorganised supply chains to try and avoid tariffs. For example, many switched the manufacturing of goods for the US market from China to Mexico or India.

But when you don’t know which countries might be next in President Trump’s firing line, it's difficult for a CEO to decide where to put the next investment that will create jobs and grow an economy - so many might choose not to bother.

Lana Payne, the president of the Unifor labour union and member of Prime Minister Trudeau's Council on Canada-US Relations, has just issued a statement in which she cautions that Trump's tariff threat remains, despite the 30-day pauses.

She calls Trump’s tariff announcement, "a turning point for our country," saying that Trump "declared economic war on Canadian workers and our country".

"There is no turning back. No one should let their guard down at this 30-day pause on the tariffs," she warns.

She says that Canadians must use the coming days ahead "to plan for a potential trade war, and to use every single available lever to build a strong, resilient, and diverse economy".

"Make no mistake, Canada’s decision to push back hard against these tariffs from the US was an important statement about our resolve and determination. We will need to rely on that resolve in the difficult days ahead."

Unifor is the largest private sector union in Canada, representing some 320,000 workers across the country.

Image source, Getty Images

Stock markets in the US and Canada have closed, after a turbulent day in which investors revealed major concerns about Trump's plan to impose tariffs on Mexico, Canada and China.

Steep losses initially reported on the Dow Jones Industrial Average, S&P 500 and Nasdaq bounced back slightly before the close of market on Monday.

It came after the announcement that tariffs on Mexico would be delayed for at least a month.

The Dow dropped by about 0.3%, the S&P by about 0.8%, and Nasdaq by 1.2%

The markets in the US and Canada had closed by the time Trudeau and Trump had announced the pause on tariffs on Canadian goods.

Tariff halt can be claimed as a win for both Trump and Trudeaupublished at 22:22 Greenwich Mean Time 3 February

22:22 GMT 3 February

Jessica Murphy
Reporting from Toronto

There's a widespread sigh of relief from Canadian politicians and business leaders who've just learned that, like Mexico, Canada has a 30-day pause on US tariffs.

After Mexico's announcement this morning, there was concern Canada would not get the same reprieve.

In a statement on X, Canada's PM Justin Trudeau mentioned the outline of a new border security plan - much of which had already been announced in December.

That C$1.3bn (£724m) plan included efforts to disrupt the fentanyl trade, new tools for law enforcement, enhanced coordination with US law enforcement, increased information sharing and limiting traffic at the border.

There was also a deployment of drones and Black Hawk helicopters for surveillance.

One new element appears to be the appointment of a "fentanyl tsar" and a $200m intelligence directive.

While the threat of tariffs remains, both Trudeau and Trump will be able to point to this outcome as a political win - the president can claim more border security, Trudeau a win on averting potentially devastating tariffs.

Image source, Reuters

President Donald Trump has now confirmed that the US is halting its plan to impose tariffs on Canadian imports, in exchange for Canada doing more to prevent illegal drugs from entering the US.

"Canada has agreed to ensure we have a secure Northern Border, " Trump writes in a post on Truth Social, the social media platform that he owns.

He quotes from Trudeau's tweet, in which the Canadian leader vowed to spent C$1.3bn (£724m) on border security measures, appoint a "czar" to oversee efforts to block sales of the drug fentanyl, and to "list cartels as terrorists".

Trump adds: "I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured."

He ends the post with the words: "Fairness for all!"

Image source, Reuters

Earlier today, we told you about how the leader of Ontario - Canada's most populous province, which makes up about 38% of the country's GDP - had set out his own pre-emptive consequences for Trump's proposed tariffs.

In the last few minutes, Ontario Premier Doug Ford has announced that his province is halting retaliatory measures it planned to implement if Trump's tariff took affect.

In a post on X, he said "temporarily" averting the tariffs is "giving time for more negotiation and time for cooler heads to prevail".

He adds that if the US tariffs do go through, Ontario "won't hesitate to remove American products" from the Canadian marketplace.

"Make no mistake, Canada and Ontario continue to stare down the threat of tariffs. Whether it’s tomorrow, in a month or a year from now... President Trump will continue to use the threat of tariffs to get what he wants," Ford writes.

He adds that the effects of the looming trade war are already being felt by businesses on both sides of the border, and that the US and Canada "need to remain united and focused on the real trade war we’re fighting, with China".

Natalie Sherman
New York business reporter

Earlier today, I spoke to Dan Dunmoyer, president and chief executive of the California Building Industry Association, which was worried especially about higher tariffs on lumber coming in from Canada.

At the time, he was holding out hope for a deal, noting that the president had "proven himself to be able to play a game of chicken like nobody else".

But he warned the back-and-forth would have costs.

"There are individuals, consumers and businesses - lives - that are put on hold or challenged and that's not good for the economy, but more important, it's not good for the people".

"That's what happens when you play high-stakes poker on the global level - there are people that get hurt."

As we've reported, Justin Trudeau has just said on X that the proposed 25% tariffs on Canadian imports will be paused for 30 days.

Trudeau also announced that Canada is implementing a "$1.3 billion border plan" to add new choppers, technology and personnel to border, as well as "increased resources to stop the flow of fentanyl".

"Nearly 10,000 frontline personnel are and will be working on protecting the border. In addition, 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," he adds.

"I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million."

Prime Minister Justin Trudeau has just confirmed that Donald Trump's proposed tariffs of 25% on Canadian goods, set to come into effect on Tuesday, "will be paused for at least 30 days while we work together".

We'll bring you more on this breaking news development shortly.

Bernd Debusmann Jr
Reporting from the White House

I've just left the room in which President Trump was meeting with the Florida Panthers.

He only briefly addressed the tariffs issue as he walked out, turning to CNN reporter Kaitlin Collins and saying "very well" when asked how his call with Prime Minister Justin Trudeau went.

When asked if tariffs were coming, Trump responded with one word: "watch".

Trump and the team are now headed to the Oval Office for pictures away from what he termed the "fake news media".

He was, it seemed, in a particularly good mood, cracking repeated jokes and smiling as he received the jersey and a gold-plated hockey stick as gifts.

Bernd Debusmann Jr
Reporting from the White House

Image source, Reuters

President Trump's call with Canadian Prime Minister Justin Trudeau is over - and he has just stepped into view.

Trump is speaking at an event with the Florida Panthers, the 2024 NHL Stanley Cup champions in the East Room of the White House.

The Stanley Cup trophy is on one side of him, while a personalised "Trump 45-47" jersey in a frame is on the other, and the famous painting of George Washington can be seen over the president's left shoulder.

Senator Rick Scott - Florida's former governor - is in the front row.

From my vantage point, I can also see Florida Representatives Byron Donalds and Ana Paulina Luna - both fierce Trump allies.

Trump jokes at one point during his address: "I don't know anything about a comeback, but this was great."

Image source, Reuters

Let's bring you some comments from the vice president who has been asked about President Donald Trump's tariffs.

Speaking during a news conference in East Palestine, Ohio, JD Vance said: "We are done being taken advantage of.

"We have got to rebalance the trade relationship between ourselves and our allies, ourselves and our adversaries. President Trump is committed to that, and tariffs is one tool that he's going to use to accomplish it."

The vice president went on to say how he'd heard complaints in recent days about how tariffs "would make Americans lives worse off".

"What actually happened is the Mexican government was so afraid of the tariffs that they actually are taking their border enforcement, and their anti-cartel activity more seriously," he argued, referencing how earlier today, Mexico's president confirmed the deployment of additional National Guard troops to the US border.

"If the Canadians are going to use their economic power to penalise Americans, I think it's totally reasonable for the American president to say we're done being taken advantage of."