MEXICO CITY, Mexico (AFP) — Mexico’s President Claudia Sheinbaum credited “dialogue” Sunday for her United States (US) counterpart Donald Trump’s decision to offer temporary relief on tariffs imposed on goods from her country.

During a rally in Mexico City to celebrate the agreement with Trump, Sheinbaum declared herself “optimistic” about the future of the trade relationship.

But she also warned, “We cannot give up our sovereignty.”

Sheinbaum originally organised the event to announce the tariff and non-tariff trade measures with which Mexico would respond if Trump had carried through with his threat.

But on Thursday, Trump once again put a pause on plans to impose a 25 per cent tariff on imports into the United States from Mexico.

Announcing the truce, Trump said he had done this out of respect for Sheinbaum and argued that the pair have a “very good” relationship.

US financial markets had also reacted negatively to the tariff threat, and most economists agree that if implemented they would damage both countries’ economies.

“We gather to congratulate ourselves because, in the relationship with the United States, with its government, dialogue and respect prevailed,” Sheinbaum said.

Addressing a crowd in the Mexican capital’s Zocalo square, she added: “We cannot yield on our sovereignty, nor can our people be affected by decisions made by foreign governments.

“In such a case, we will always act immediately,” she said. “I am convinced that the relationship must be good, respectful, and that dialogue will always prevail.”