Donald Trump has announced that most goods imported from Mexico are to be exempt from his trade tariff regime for at least four weeks, just days after the charges were imposed.

He confirmed the move following a phone call with his Mexican counterpart and, according to his commerce secretary, was due to announce a similar concession to Canada later in the day.

The latest climbdown by the US president came after he surprised financial markets on Wednesday by waiving tariffs against carmakers following pleas from motor industry bosses.

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The White House revealed then that parts due to flow into the US from Mexico and Canada as part of the manufacturing supply chain would not qualify for tariffs so long as they complied with an existing trade agreement struck between the three.

‘Rules of origin’ guidelines under the USMCA deal allow goods to move between the three countries tariff-free if they qualify with a designation that they were made in North America.

US commerce secretary Howard Lutnick told Sky’s US partner network CNBC that if the concession was extended to Canada, then more than half of usual cross border trade volumes would be exempt.

Mr Lutnick said that, as things stand, the reprieve would only last until 2 April when the Trump administration plans to impose reciprocal tariffs.

But he signalled there were signs of progress in Mr Trump’s dispute with America’s closest trading partners as each had worked hard to make progress in tackling imports of Fentanyl – blamed for high crime and deaths in US communities.

The car industry believes that no products from Canada and Mexico are currently subject to tariffs as they comply with the USMCA deal agreed in 2020 but that could still change from 2 April.

Mr Trump is under pressure to relax his tariff regime amid a backlash from US firms and financial market investors who fear they are self defeating.

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A closely-watched forecast has even suggested that the threats of a trade war were enough to push the US economy into recession.

The dollar has sunk in value and US government borrowing costs have risen on the back of the turmoil.