US Commerce Secretary Lutnick hints Trump may roll back tariffs on Canada and Mexico
US Commerce Secretary Howard Lutnick told Fox News on Tuesday that US President Donald Trump may roll back tariffs on Mexican and Canadian imports as early as Wednesday. While speaking to reporters later in the day, "it will not eliminate the tariffs, but it might modify the tariffs somewhat. That's a decision that will come tomorrow," he explained.
Commenting on the impact of tariffs on prices during a separate interview with CNBC, "there may well be short-term price movements, but in the long-term, it's going to be completely different," Lutnick said.
Key highlights
If USMCA rules are followed, Trump is considering a relief.
We will see tariff changes on April 2nd with Canada and Mexico.
The administration will balance the US budget.
Trump is to move with Canada and Mexico, but not all the way.
Trump is considering relief for USMCA-compliant goods.
However, the New York Times reported early Wednesday that President Trump signalled privately he'll stick with tariffs.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
