Investing.com - U.S. President Donald Trump agreed to delay tariffs on Mexico for one month after coming to terms on Monday with Mexican President Claudia Sheinbaum to send troops to reinforce the U.S.-Mexico border.

In a telephone conversation, the two leaders jointly agreed to work to bolster security at Mexico's northern border in order to stem the flow of illegal drugs, particularly the opiate fentanyl, into the U.S.

Writing on the X, Sheinbaum said she and Trump had arrived at a series of agreements, including a commitment by Mexico to immediately send 10,000 National Guard members to the border. The U.S. also agreed to work to avoid the trafficking of high-powered weapons into Mexico, she said.

Trump, meanwhile, said on his Truth Social platform that the conversation with Sheinbaum was "very friendly", noting that further negotiations will be held during the pause in his 25% tariffs on Mexico. Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent and Secretary of Commerce Howard Lutnick would lead the talks with "high-level Representatives of Mexico", according to Trump. He added that he looked forward to participating the negotiations.

The agreement comes hours before Trump's tariffs on some of America's closest trading partners are set to come into effect. Trump has slapped 25% levies on Mexico and Canada, as well as a 10% tariff on China.

Together the three countries account for just over $2 trillion in annual trade, according to Reuters.

"Avoidance of a 25% tax across one of the world’s most critical economic borders is clearly positive, but [...] there are still likely to be incremental tariffs of some sort going forward, even if Trump walks back the severity his [...] pronouncements," analysts at Vital Knowledge said in a note to clients.

Although the deal temporarily removes some pressure on Mexico, it does not appear immediately likely that Canada and China will evade the tariffs, which are due to take effect on Tuesday. Trump has said he has spoken with Canadian Prime Minister Justin Trudeau and will speak with him again this afternoon, while media reports suggest Beijing is preparing to discuss trade with the White House.

Canada, which also faces a 10% levy on energy products, has announced plans to roll out retaliatory tariffs on U.S. goods. China's Ministry of Commerce intends to challenge the actions at the World Trade Organization.

Elsewhere, Trump has said that separate tariffs on the European Union would "definitely happen", although he did not specify when they would be implemented. German Chancellor Olaf Scholz has suggested the 27-member bloc would respond with its own tariffs if necessary, although he noted a desire to reach an agreement on trade.

U.S. stocks pared back earlier gains following the announcement of the delayed tariffs on Mexico, slicing its losses for the day by more than half. Globally, financial markets roiled on Monday as investors assessed the implications of the actions.

Economists have suggested Trump's tariffs could cause a period faster inflation and weaker growth in the U.S., and potentially fuel recessions in Canada and Mexico.

Trump has said the measures may lead to some "pain" in the short-term for American consumers, but argued it "will all be worth the price that must be paid".