Trump administration shows tariffs on Canada and Mexico may be exempted soon

WASHINGTON (AP) – 25% tariffs signed by President Donald Trump on Canada and Mexico could emerge, which hurt stock markets on Tuesday, fearing consumers and launching a trade war, Commerce Secretary Howard Lutnick said.

In an interview with Bloomberg Television on Wednesday, Lutnick said Trump will update his tariff plan through an afternoon announcement, which may use departments such as Autos from import taxes.

“There will be taxes, let’s make it clear,” Lutnik said. “But his idea is that maybe it can- maybe-he will consider giving them relief until we reach April 2.”

On April 2, Trump plans to announce what he calls “countdown” tariffs to meet tariffs, taxes and subsidies provided by other countries. This could significantly increase tariff rates for global charges, meaning there is still a risk of wider tariffs.

Lutnick said he will talk to Trump on Wednesday morning about possible options for Canada and Mexico, saying the two countries are working to address the U.S. president’s concerns about drug trafficking. Lutnick said Trump announced his decision Wednesday afternoon.

On Tuesday, Trump taxed Canadian energy products such as oil and electricity on a 25% tax on Mexico and Canada imports, with a lower tax rate. The president also increased the 10% tariff he signed in China to 20%. The government said the tariffs were to stop the smuggling of drugs such as fentanyl, but Trump also suggested that the tariffs were to get rid of the ongoing U.S. trade deficit.

Taxes sparked retaliation from Canada and China almost immediately, with Mexico planning to announce its reaction on Sunday. U.S. stock markets have abandoned all gains since Trump won last year’s presidential election, consumers have been exhausted by inflation and fear the cost of raising taxes will lead to higher prices. These concerns could prompt Lutnick to say a possible retreat in an interview with Fox Business Network on Tuesday afternoon.

“I think he’ll figure it out, you’ll do more, and I’ll meet you somehow.” Lutnick told Fox Business Network that his comments resulted in the stock market reducing losses on the day.

But in a joint speech to Congress on Tuesday night, Trump appears to be planning to move forward with tariffs.

The U.S. president has tried to see possible economic harms as “some distractions” as government suggests that inflation rates and slower growth estimates are overstated by the government.

“This may be a little bit of a correction period,” he said, claiming farmers will benefit from countries where U.S. export tariffs. “You have to endure me again, it’ll be better.”

Nevertheless, Canadian Prime Minister Justin Trudeau views Trump’s tariffs as a betrayal of friendship between the two countries.

Trudeau said his country will exceed US$100 billion (USD) in US goods tariffs in 21 days.

“Today, the United States launched a trade war against Canada, with their closest partners and their closest friends and allies. Meanwhile, they are talking about actively working with Russia and comforting with lies, murdered dictator Vladimir Putin. It makes sense,” Trudeau said.