Posted on 03/05/2025 5:32:07 AM PST by Miami Rebel
President Donald Trump could reduce the 25 percent tariffs that he imposed Tuesday on Canada and Mexico, Commerce Secretary Howard Lutnick said in an interview on Fox Business Network, less than 18 hours after the duties went into effect.
“Both the Canadians and Mexicans were on the phone with me all day today trying to show that they’ll do better” on reducing fentanyl flows into the United States, Lutnick said. “So I think [Trump] is going to work something out with them.”
“It’s not going to be a pause — none of that pause stuff,” he continued. “But I think he’s going to figure out, ‘you do more, and I’ll meet you in the middle some way.’ And we’re probably going to be announcing that tomorrow.”
“So somewhere in the middle will likely be the outcome. The president moving with the Canadians and the Mexicans,” Lutnick said, adding that he did not expect immediate tariff relief for China since it continues to subsidize fentanyl production that is killing Americans.
Trump’s tariffs on Canada and Mexico sent tremors throughout the world capitals on Tuesday and helped drive down financial markets in New York, shortly before the president is scheduled to address a joint session of Congress. Business leaders and farm state Republicans called for a quick end to the trade war, amid alarm about their bottom lines and a return of surging inflation.
One senior Republican aide, who was granted anonymity to discuss a politically sensitive matter, said the White House’s apparent retreat from the hours-old tariffs “hasn’t been communicated to us” but called the dizzying set of announcements “juvenile.”
Lutnick indicated Tuesday afternoon that Trump could tie tariff reductions to the implementation of the U.S.-Mexico-Canada Agreement that his first administration negotiated to replace the decades-old North American Free Trade Agreement.
“The president is considering giving you relief if you live under those rules,” Lutnick said. “If you haven’t lived under those rules, well, then you have to pay the tariff.”
That suggests that the tariff could be eliminated or reduced for some sectors, such as autos, if they are abiding by the USMCA’s tough “rules-of-origin” that govern how much of a car’s parts need to come from within the region.
However, it was not immediately clear what Lutnick actually meant by those remarks, and the White House did not respond to a request for comment. The United States, Canada and Mexico are scheduled to engage in an extensive review of the North American trade agreement next year, although the Trump administration has indicated they want to accelerate the timetable for that review.
Lutnick said Tuesday Trump ultimately wants Canada and Mexico to clamp down so hard on fentanyl shipments that there are no more fentanyl deaths in the United States.
“The fentanyl deaths are just not declining the way we expected,” Lutnick said. “They’ve just got to end.”
Even if the fentanyl issue is completely resolved, Canada and Mexico could face a new tariff threat in early April under Trump’s reciprocal tariff plan, Lutnick added.
“Canada has a 5 percent sales tax. What is that?” Lutnick said, suggesting that it constitutes a kind of trade barrier. “It’s just being sneaky.”
Canada’s dairy market access barriers and its digital services tax are two more policies that Trump could counter with his reciprocal tariffs, the Commerce secretary said.
I have a bunch of questions.
1. Where have Mexico and Canada violated USMCA? If they have, there should be mechanism within the treaty to fix blame and mandate solutions. If no such provisions were in the treaty, why was it passed and signed?
2. How is a sales tax a trade barrier? Do the Canadians apply it only to US products?
3. Why is Canada even brought into the fentanyl discussion? It represents less than a rounding error in the scope of the problem. Last year over 21,000 pounds were seized at the Mexican border. Less than 50 pounds were seized coming from Canada, and the Canadians seized as similar amount crossing into their borders from the US.
4. Last and most importantly, why is Lutnick diluting the whole rationale of exacting tariffs by bringing in fentanyl as a bargaining chip? If the overarching problem is unfair competition, easing tariffs because Mexico or Canada announces heightened border security does zero to alleviate the problem.
Not sure why, but I get really bad vibes from Lutnik. He reminds me of a used car salesman. Does not radiate trust at all.
I'm betting that Canada does, too.
We know only a tad of what these people know...and our knowledge comes via the media.....who are not the greatest purveyors of TRUTH on the planet.
I'm taking a wait and see.
“We know that Mexico imports parts from China and that’s a no-no under USMCA...”
You may know, but I don’t. Please share a source.
Please google...
You mean the issue that was being addressed last November?
My intuition has proven to be very accurate in the past and has saved my sorry butt many times.
That’s why I called it a “feeling” and not a knowing.
With people like him, my trust is earned, it’s not automatic.
Precisely. Canada is not in violation of NAFTA nor a drug or illegals problem. There are no grounds for punitive tariffs whatsoever. Tariffs ingeneral and especially on a good friend are bad juju.
Canada already fleeces us with tariffs, some over 100%.
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