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U.S. Commerce Secretary Howard Lutnick said some sectors could be “missed” by tariffs imposed on Canada and Mexico, making automakers’ stocks higher.
Lutnik said U.S. President Donald Trump is considering which departments may get some relief from the 25% tariff that will take effect on Tuesday.
“He was thinking about what parts of the market, maybe he would consider giving them relief,” he said.
Lutnick told Bloomberg TV on Wednesday that the news triggered a Wall Street rally after the stock slipped the day before.
The Commerce Secretary said the government is studying rules of origin that complies with the 2020 U.S. Mexico Agreement, including automakers.
While some departments will still face 25% tariffs, others may see some relief, Lutnik said. “It could be a car, it could be someone else,” he added.
Trump’s tariffs have sparked serious retaliation in Ottawa and have caused chaos in relations between the United States, Mexico and Canada.
They are especially important for automakers, which usually transfer components between the three countries during production.
Lutnick, former CEO of Financial Services Group, has become Trump’s top negotiator for deals with Canada and Mexico, even if other officials, such as Hawke’s White House, such as Hawke’s White House adviser.
Even if Washington keeps any taxes on Ottawa, outgoing Justin Trudeau shows that outgoing Prime Minister Justin Trudeau will not raise Canada’s retaliatory tariffs, a senior government adviser told the Financial Times.
Lutnick said his understanding is that the three American automakers – Ford, General Motors and Stelantis owned Chrysler all comply with the USMCA rules of origin.
“If you comply with the agreement, then maybe you avoided the tariffs,” Lutnik added. “And, if you don’t comply with the agreement, then you’re at your own risk. You know you don’t comply with it.”
Stocks for general electric motors jumped nearly 4% shortly Wednesday, while Ford rose about 3%. Stellantis’s share price climbed 5%.
The rally restored most of the reason that when tariffs were imposed, the automaker’s stock was lost.
Bernstein analysts ranked GM as the most exposed U.S. automaker. It estimates that the company will suffer a decline in cash flow of $6.7 billion next year, while Ford’s $2.9 billion, and Milan-listed Stellantis’ cash flow dropped by 3.5 billion euros.
European brands, many of which are sold in the U.S., were also affected, with Volkswagen’s shares bounced 3.5% in trading earlier Wednesday after a day before decline.
Lutnick stressed complaints from the Trump administration that Mexico and Canada failed to cut trafficking in the deadly opioid fentanyl and its calls on these countries to consolidate their borders.
“If they can stop the flow of fentanyl, the president will open up… Maybe, maybe he will consider giving them relief until we’re on April 2.”
That was the date when Trump announced a wider “countdown” tariff on U.S. trading partners and allies.
The U.S. president last month ordered his trade advisers to propose new tariffs on a “country-by-country” basis in retaliation against taxes, subsidies, taxes and regulations that Washington believes are unfair.
White House officials suggest that Brazil, India, Japan and the EU face special risks of additional responsibilities.
Lutnik added that more comprehensive renegotiations will be held with the USMCA next year.
Trudeau described Trump’s tariffs on Canadian goods as “a very stupid thing” on Tuesday and released a 25% tariff on US imports of CAD 30 billion ($21 billion).
Treasury Secretary Scott Bessent spoke on Fox News Wednesday morning, his name is Trudeau, who has resigned from his nearly ten years of rule this year, “a duck with a foot” and “a dead man walks.”
Mexican President Claudia Sheinbaum has postponed Mexico’s retaliation announcement to Sunday, saying she hopes to talk to Trump on Thursday morning.
Other reports by Ilya Gridneff
