US Secretary of Commerce Howard Lutnick said President Donald Trump is considering a transaction that offers tariff exemptions in Canada and Mexico.
The potential rollback he may announce on Wednesday comes as many US companies raised concerns about Trump’s decision to strike US imports from the two closest trading partners with a 25% import tax.
After a two-day decline, the major US stock indexes were trading slightly higher early on Wednesday.
Canadian Foreign Minister Melanie Jolly told the BBC Newsnight on Tuesday that her office had not been contacted about plans to cut tariffs.
American officials “can say a lot,” but “the only thing that really makes a decision is President Trump,” Jolie said.
The US president used most of his speech on Congress on Tuesday to outline trade policies, but did not say whether he plans to cut tariffs that came into effect this week.
Canada and Mexico have announced retaliatory import taxes in the US after Washington’s 25% tariff on their two neighbors came into effect Tuesday.
Billions of valued goods cross the US, Canada and Mexico borders every day, and their economies are deeply integrated.
Trump says he wants to protect American industry and boost manufacturing, but many economists have warned that such tariffs could raise prices for U.S. consumers.
On Wednesday, Lutnick said the tariffs were in place, but suggested that some items could be “excluded.”
“There are tariffs – let’s be clear – but what he’s thinking is, of course, which section of the market he might consider giving them peace of mind until we reach April 2nd,” Rutnick told Bloomberg Wednesday.
“It’s 25%, but there’s a few categories left – it could be cars, and maybe it’s something else,” he added.
A day ago at Fox News, Lutnick said it would increase the possibility of compromise and reductions in tariffs in Mexico and Canada, and that Trump is squeezing offers to meet allies “in the middle.”
Trump said he will move forward on April 2nd with mutual tariff plans in other countries he considers unfair to treat the United States.
Canadian Prime Minister Justin Trudeau has condemned Trump’s drastic tariffs on his country, calling it “very stupid,” and vowed to have a “relentless battle” to protect the economy.
Trudeau announced retaliatory tariffs on US exports, warning that the trade war would be expensive for both countries.
But Trump pushed further in his true social platform post, saying, “Explaining Canadian Governor Trudeau that if he places a retaliation fee on the US, our mutual tariffs will soon increase as well!”
Trudeau has accused the US president of “it will be easier to use us together as he plans to completely collapse the Canadian economy.”
“It’s never going to happen. We’re not going to be 51st,” he told reporters.
Washington also stepped up the trade war with Beijing on Tuesday, adding to Trump’s first term and existing taxes announced last month as a new 10% tax on Chinese imports that took effect.
“China will fight until the fierce end of the trade war,” a spokesperson for China’s Foreign Ministry said their country has announced TIT tariffs on agricultural imports from the United States.
