Commerce Secretary Howard Lutnick hinted at a potential agreement between the Trump administration and leaders of Canada and Mexico, which could lead to a rollback of some tariffs imposed on both nations.
Canada and Mexico, two of America’s largest trading partners, had implemented retaliatory tariffs after President Donald Trump’s tariffs took effect on Tuesday. Trump defended the move, arguing that both countries had failed to take sufficient action to curb illegal immigration and drug trafficking across the U.S. border.
During a Tuesday appearance on FOX Business’ Kudlow, Lutnick told host Larry Kudlow that Trump is likely to seek a compromise with Canada and Mexico, focusing on the United States-Mexico-Canada Agreement (USMCA) to ensure fairer trade between the nations.
“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 Commerce Secretary stated that the administration has clearly communicated its concerns about border security and illegal drug trafficking to officials in Canada and Mexico. “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 Americans. It’s got to end.”
As of Tuesday, U.S. imports from China—America’s third-largest trading partner—are now subject to an additional 10% tariff, doubling the initial 10% tariff imposed on Chinese goods last month. Meanwhile, tariffs on imports from Canada and Mexico have increased to 25%, with one exception: Canadian oil imports, which are subject to a reduced 10% tariff under a carve-out provision.
“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.”
