Trump Administration Signals Possible Tariff Relief for Canadian and Mexican Goods

The Trump administration may be preparing to ease tariffs on goods from Canada and Mexico, Commerce Secretary Howard Lutnick suggested, with an announcement potentially coming as soon as Wednesday.

Speaking in an interview with Fox Business on Tuesday, Lutnick revealed that discussions between U.S. officials and their Canadian and Mexican counterparts had intensified, signaling a potential compromise.

“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’s listening because you know he’s very, very fair and very reasonable,” Lutnick stated. “So I think he’s going to work something out with them—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. We’re probably announcing that tomorrow.”

While Lutnick did not disclose specific measures under consideration, his remarks suggest that President Donald Trump may be open to adjusting the across-the-board tariffs imposed on Canadian and Mexican imports. These tariffs, which took effect overnight, were tied to concerns over the flow of fentanyl and illegal immigration into the U.S.

Lutnick clarified that the administration was unlikely to roll back the tariffs entirely but hinted at a middle-ground solution. “The tariffs will likely land somewhere in the middle, with Trump moving with the Canadians and Mexicans, but not all the way,” he said.

He also referenced the U.S.-Mexico-Canada Agreement (USMCA), which was negotiated during Trump’s first term, as a potential framework for relief. “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,” Lutnick added.

The sudden imposition of tariffs, among the most sweeping trade measures enacted in nearly a century, has already sparked strong reactions from Canada and Mexico, both of which have vowed retaliatory tariffs on U.S. exports.

Stock markets reacted negatively to the uncertainty, with global equities taking a hit. The S&P 500 dropped 1.2% on Tuesday, wiping out gains made in the wake of Trump’s re-election. Market volatility was also reflected in major international indices, with London and Tokyo experiencing similar declines.

However, Lutnick’s comments on a possible compromise led to a late recovery in certain sectors. Auto and banking stocks saw an uptick in post-market trading, while Canadian heavy crude prices strengthened.

The tariff policy has drawn sharp criticism from both sides of the political aisle, with lawmakers expressing concerns over the impact on American consumers and industries. Key Republican and Democratic figures have urged the president to reconsider the strategy, warning that it could drive up prices and hurt sectors like agriculture and automobile manufacturing.

“It is my hope that the tariffs against Canada and Mexico will not remain in effect for an extended period of time,” Texas Senator Ted Cruz said on Tuesday. “These tariffs should act as the incentive that President Trump said they are designed to be, and as a consequence, the president will lift them.”

Trump had previously delayed the implementation of tariffs on Canada and Mexico for a month but eventually allowed them to proceed. On Monday, he dismissed any further postponements, stating there was “no room left” for Canada and Mexico to delay the duties as they had done earlier in the year.

With an official announcement on tariff relief expected soon, attention is now focused on the conditions Canada and Mexico may need to meet to secure exemptions. If an agreement is reached, it could ease tensions in North American trade relations while providing much-needed stability for industries on both sides of the border.

However, if negotiations falter, the prospect of a prolonged trade dispute looms, potentially disrupting supply chains and further rattling financial markets. All eyes are now on the White House as businesses and policymakers await Trump’s next move.