Commerce Secretary Howard Lutnick signaled a possible agreement between the Trump administration and leaders of Canada and Mexico that could see some of the tariffs imposed on both nations rolled back.
Canada and Mexico, two of the United States’ biggest trading partners, have imposed retaliatory tariffs following those imposed by President Donald Trump that went into effect Tuesday. Trump said the increases were in response to both countries not doing enough to curb the flow of illegal immigration and illicit drugs across their borders with the U.S.
During a Tuesday appearance on FOX Business’ “Kudlow,” Lutnick told host Larry Kudlow that Trump will likely look to meet America’s neighbors in the middle with a focus on the United States-Mexico-Canada Agreement (USMCA), which was created to create fairer trade between the nations.
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“He’s really looking carefully at that trying to figure out if there is a way in there that he can come in the middle, where he can give the Canadians and Mexicans something, but they have to got do more,” he told Kudlow. “They’ve got to end fentanyl death. You can’t just say it’s OK that people can die. That is just not a thing.”
“It’s not gonna 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 someway,” he added. “We’re going to probably be announcing that tomorrow. So somewhere in the middle will likely be the outcome — the president moving with the Canadians and Mexicans but not all the way,” he added.
The secretary said the administration has made its concerns about the border and illegal drugs known to Canadian and Mexican officials.
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“If you respect us as your best trading partner, end it,” he said. “And you have got to end fentanyl. And the way we’re going to describe fentanyl is very simple — autopsied American guts. It’s got to end.”
Effective Tuesday, U.S. imports from China, the third-largest U.S. trading partner, became subject to a new 10% tariff on top of the initial 10% tariff he imposed on Chinese goods last month.
Tariffs on imported goods from Canada and Mexico rose with 25% tariffs levied on all imports from the two countries. The tariffs include a carve-out for a lower 10% tariff on Canadian oil imports.
“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 said. “So I think he’s going to work something out with them.”
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