By Jack Davis | March 5, 2025 | COMMERCE
Commerce Secretary Howard Lutnick hinted at a potential agreement between the Trump administration and leaders of Canada and Mexico that could lead to a rollback of some tariffs imposed on both nations. The move comes after Canada and Mexico imposed retaliatory tariffs following President Donald Trump’s new tariffs that took effect on Tuesday. Trump defended the tariffs by arguing that both countries had failed to take sufficient action to curb illegal immigration and drug trafficking across the U.S. border.
During a Tuesday appearance on FOX Business’ Kudlow, Lutnick told host Larry Kudlow that Trump is likely to seek a compromise focusing on the United States-Mexico-Canada Agreement (USMCA) to ensure fairer trade between the nations. “He’s really looking carefully at that trying to figure out if there is a way in there that he can come in the middle, where he can give the Canadians and Mexicans something, but they have to do more,” Lutnick explained. “They’ve got to end fentanyl death. You can’t just say it’s OK that people can die. That is just not a thing.”
Lutnick added, “It’s not gonna be a pause. None of that pause stuff. But I think he’s going to figure out, you do more, and I’ll meet you in the middle someway. We’re going to probably be announcing that tomorrow. So somewhere in the middle will likely be the outcome—the president moving with the Canadians and Mexicans but not all the way.”
The Commerce Secretary stated that the administration has clearly communicated its concerns about border security and illegal drug trafficking to officials in both countries. “If you respect us as your best trading partner, end it,” he said, adding emphatically, “And you have got to end fentanyl. And the way we’re going to describe fentanyl is very simple — autopsied Americans. It’s got to end.”
In related developments, U.S. imports from China—America’s third-largest trading partner—are now subject to an additional 10% tariff, effectively doubling the initial 10% tariff imposed on Chinese goods last month. Meanwhile, tariffs on imports from Canada and Mexico have increased to 25%, with a notable exception: Canadian oil imports are subject to a reduced 10% tariff under a carve-out provision.
“Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better, and the president is listening because you know he’s very, very fair and very reasonable,” Lutnick told Kudlow. “So I think he’s going to work something out with them.”
This potential deal highlights the administration’s efforts to balance trade policies with national security concerns. For further details on the USMCA and related trade negotiations, readers can visit official trade resources. As negotiations continue, the outcome of this tariff “deal” may reshape trade dynamics with two of America’s largest trading partners while addressing critical issues such as illegal immigration, drug trafficking, and public safety.
