US President Donald Trump announced last Friday that the US will not be imposing a 5% tariff on Mexican imports into the US.

Trump reported that the US and Mexico have come to an agreement which will see Mexico strengthen its immigration system.

The markets reacted quite well to the news, with the Dow Jones predicted to open 100 points higher on Monday. The decision to scrap the planned tariffs comes not too long after they were announced. However, Trump’s original threat to impose tariffs on Mexico over illegal immigration at America’s southern border caused the markets to shake a bit. The stock markets have already been going through rough waters over uncertainty in the escalating trade war between the world’s two largest economies, the US and China.

President Trump’s threats of tariffs against Mexico added to the existing uncertainty regarding global trade. Amid the news of potential new tariffs against Mexico and extending tariffs against China, the Federal Reserve and IMF released warnings about global trade. The two bodies released separate warnings just one day before Trump announced an immigration deal with Mexico. Officials at the Federal Reserve were flirting with the idea of lowering interest rates, an idea that is still on the table should the economic situation get out of hand. According to Federal Reserve Chairman Jerome Powell, the Federal Reserve will continue “closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion.”