As fears of a damaging global trade war mounted, Trump and his Mexican counterpart Claudia Sheinbaum announced the halt after she agreed to send 10,000 troops to the US-Mexico frontier to stop the flow of the drug fentanyl.
There would now be further talks for a long-term deal, said Trump, who had media tycoon Rupert Murdoch in the Oval Office as he signed a number of executive orders.
But despite a “good talk“ with Canadian Prime Minister Justin Trudeau early Monday, Trump said there was still no agreement. The two leaders were due to talk again later Monday.
Trump said last-minute talks between Washington and Beijing will likely be held “probably in the next 24 hours” to avoid new tariffs on Chinese imports.
Stocks slump
Wall Street's three main indices fell sharply in early deals, but clawed back ground after Trump's announcement on the Mexico deal.
The Mexican peso and Canadian dollar also sank against the greenback, while oil jumped despite Trump limiting the levy on Canada's energy imports at 10 percent to avoid a spike in fuel prices.
“This is not a trade war, this is a drug war,“ National Economic Council Director Kevin Hassett told CNBC.
US government figures show that only a minimal quantity of drugs comes via Canada.
Canada has vowed to respond strongly to the tariffs.
Musk is running a cost-cutting drive in Trump's White House that, in a separate development, could shut down the US Agency for International Development.
Trump has upped the pressure recently by calling Canada's existence into question -- once again calling on Monday for it to become the 51st US state.
He has insisted that the impact would be borne by foreign exporters without being passed on to American consumers, despite most experts saying the contrary.
Trump has also wielded tariffs as a threat to achieve his wider policy goals, most recently when he said he would slap them on Colombia when it turned back US military planes carrying deported migrants.
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