Lutnick predicts U.S. trade deal announcement with Mexico and Canada after tariffs imposed
Howard Lutnick suggests that a trade deal between the US, Mexico, and Canada may be revealed soon after the US imposed tariffs on both countries, despite retaliatory measures already in place.
US Commerce Secretary Howard Lutnick has hinted at a possible transaction between the US, Mexico, and Canada being announced shortly after the US imposed hefty taxes on both countries. Lutnick expressed optimism that President Donald Trump would reach an agreement, despite the recent escalation in tariffs and retaliatory actions. The deal could be finalized as early as tomorrow, Lutnick suggested, signaling that the US might find a middle ground with its North American neighbors.
The duties, which included a 25% charge on imports from Mexico and Canada, have already provoked strong responses. Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum have both vowed to retaliate with their own levies. The sudden back-and-forth within these nations has added a layer of uncertainty to the global economy, complicating business decisions and raising concerns among American farmers.
Could the US and Mexico/Canada reach a deal despite tariffs?
Howard Lutnick confidently stated that President Trump would likely announce a accord with Mexico and Canada within a short time. "I think he’s going to work something out with them," Lutnick said on Fox Business, adding that it wouldn't be a temporary pause, but rather a more permanent resolution. Lutnick emphasized that Trump was prepared to meet Mexico and Canada "in the middle" to achieve a compromise. Despite this optimism, the imposition of fees on Mexican and Canadian imports earlier this week, further complicating the diplomatic landscape.
The situation has created unease in the commerce world, with Lutnick acknowledging that the whipsaw application of levies has created ambiguity. This rapid back-and-forth has forced companies to make tough decisions, with the US economy already showing signs of strain.
What impact will retaliatory taxes have on the US economy?
The imposition of tariffs on Mexican and Canadian goods has led to significant retributive actions. Prime Minister Justin Trudeau quickly announced a 25% duty on C$30 billion worth of US products, followed by another round on C$125 billion of US goods within 21 days. "This is a very dumb thing to do," Trudeau remarked, expressing his frustration. Mexican President Claudia Sheinbaum also pledged retaliatory tolls on United States imports, calling the decision harmful to both domestic and foreign businesses.
These fees are already impacting American farmers, who face additional financial strain. Zippy Duvall, head of the American Farm Bureau Federation, warned that the tariffs could worsen conditions for farmers. "Farmers and ranchers are concerned with the decision to impose increased charges on shipments from Canada, Mexico, and China," Duvall explained, adding that growers are already losing money on crops. To mitigate the impact, the US Department of Agriculture had to create a Market Facilitation Program during the previous administration to offset losses caused by China’s retaliatory tariffs.