Commerce’s Lutnick hints at possible tariffs pact with Canada, Mexico

In a recent development amid escalating trade tensions, U.S. Commerce Secretary Howard Lutnick has indicated that President Donald Trump is considering offering partial tariff relief to Canada and Mexico. This potential concession comes in response to the significant backlash following the administration's imposition of 25% tariffs on imports from these neighboring countries, effective March 4, 2025.

Speaking to Fox News, Lutnick acknowledged ongoing communications with Canadian and Mexican officials, suggesting that the President is open to negotiating adjustments. He stated, "Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better, and the president is listening because, you know, he’s very, very fair and very reasonable." Lutnick hinted at a possible compromise, adding, "I think he’s gonna figure out, ‘You do more, and I’ll meet you in the middle someway,’ and we’re going to probably be announcing that tomorrow."

The initial tariffs were implemented as part of the administration's strategy to address national security concerns, particularly focusing on the flow of fentanyl into the United States. However, these measures have been met with swift retaliation. Canada has already imposed 25% tariffs on $155 billion worth of U.S. goods, with plans to expand these measures in the coming weeks. Mexico has also announced intentions to implement counter-tariffs, details of which are expected to be disclosed soon.

The economic repercussions have been immediate, with significant declines observed in major U.S. stock indices. The S&P 500 index fell by 1.8%, while the Nasdaq-100 index dropped by 2.6%, reflecting investor concerns over potential disruptions to trade and supply chains across North America.

Lutnick emphasized that any potential relief would not entail a complete rollback of the tariffs. Instead, the administration is considering adjustments contingent upon adherence to the United States-Mexico-Canada Agreement (USMCA) terms. He remarked, "If you live under those rules, then the president is considering giving you relief. If you haven’t lived under those rules, well, then you have to pay the tariff."

As discussions progress, stakeholders across various industries are closely monitoring the situation, hopeful that a resolution can be achieved to mitigate further economic fallout. The administration's forthcoming announcements will be pivotal in determining the trajectory of trade relations and economic stability in the region.