Last-minute phone calls pull the North American neighbours back from the brink of a trade war, but the US is still targeting Chinese imports.

President Trump granted Mexico and Canada a 30-day reprieve on U.S. tariffs after both nations agreed to intensify efforts to block illicit drugs and migrants.

U.S. tariffs of 10% on Chinese imports came into effect on Tuesday, risking a renewed trade war between the world's top two economies as President Donald Trumppunishes China for not halting the flow of illicit drugs.