Trump considers tariff reduction for Canada and Mexico
President Donald Trump may reduce the 25% tariffs imposed on Canada and Mexico, announced Commerce Secretary Howard Lutnick. He stated that talks with the governments of both countries are ongoing, and a possible decision could be made within the next few hours, reports Politico.
Lutnick announced that President Trump is open to reducing tariffs on products from Canada and Mexico, which took effect recently. In his view, both countries are engaged in intensive negotiations with the US administration, aiming to demonstrate their ability to more effectively limit the influx of fentanyl into the United States.
"It’s not going to be a pause, none of that pause stuff, but I think he’s going to figure out, you do more, and I’ll meet you in the middle some way, and we’re going to probably be announcing that tomorrow," said Lutnick in an interview with Fox Business Network, emphasising that Trump wants an agreement but expects real action. He added that an official decision on this matter may be made as early as Wednesday, reports Politico. "I think [Trump] is going to work something out with them," he stressed.
"So somewhere in the middle will likely be the outcome. The president moving with the Canadians and the Mexicans," said Lutnick.
According to Politico, the tariffs imposed by Trump have caused concern among investors and led to declines on the New York Stock Exchange. Many business leaders and Republican politicians from agricultural states have called for an end to the trade war, fearing its negative impact on the economy and inflation.
Lutnick announced that the reduction in tariffs might depend on adherence to the rules of the USMCA agreement, which replaced NAFTA. Particularly important are the regulations regarding the origin of automotive components, meaning that some sectors of the economy may anticipate tariff relief.
Despite the possibility of easing trade policy towards Canada and Mexico, the Trump administration is not planning concessions towards China. Lutnick emphasized that Beijing continues to subsidize the production of fentanyl, which is being smuggled into the USA.
More tariffs coming as early as April?
Regardless of the ongoing negotiations, Lutnick warned that Canada and Mexico could face additional tariffs as early as April. Trump might respond with tariffs to the Canadian digital tax and the limited access of American companies to the dairy market.
"Canada has a 5 percent sales tax. What is that? It’s just being sneaky," commented Lutnick, suggesting that Trump won't end the trade war with northern neighbors as quickly as some might hope.
