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Trump's Tariff Deal with Canada and Mexico: What to Expect

3/5/2025
US Commerce Secretary Howard Lutnick hints at a potential tariff reduction deal with Canada and Mexico amid rising tensions. As retaliatory measures escalate, will a resolution be reached? Trudeau vows to protect Canada's economy against Trump’s tariffs!
Trump's Tariff Deal with Canada and Mexico: What to Expect
Amid escalating trade tensions, Trump may announce a tariff deal with Canada and Mexico. Will the trade war cool down, or are more confrontations ahead?

US Commerce Secretary Hints at Tariff Reduction Deal with Canada and Mexico

In a recent interview with Fox Business Network, US Commerce Secretary Howard Lutnick indicated that President Donald Trump is likely to unveil a deal aimed at reducing tariffs on Canada and Mexico. Lutnick shared that both Canadian and Mexican officials had been in constant communication with him, discussing their commitment to enhancing efforts to curb the flow of fentanyl into the United States.

Canada's Reaction to Tariff Situation

Despite Lutnick's optimistic outlook, Canada's Minister of Foreign Affairs, Mélanie Joly, expressed skepticism regarding the proposed tariff reductions. In an interview with the BBC's Newsnight, Joly stated that her office had not received any communication about the impending plan, highlighting the uncertainty surrounding the negotiations.

In response to Washington's imposition of a 25% tariff, both Canada and Mexico announced retaliatory import levies on US goods. Lutnick clarified his expectation that these tariffs would be lowered rather than merely paused, predicting that President Trump would seek a middle ground in negotiations.

Trudeau's Strong Opposition to US Tariffs

On the same day, Canadian Prime Minister Justin Trudeau criticized Trump's sweeping tariffs, labeling them as a "very dumb thing to do." Trudeau vowed to undertake a "relentless fight" to protect the Canadian economy, announcing retaliatory tariffs on US exports. He cautioned that a trade war could prove detrimental for both nations.

Escalation of Trade Tensions

In a post on his Truth Social platform, Trump responded to Trudeau's actions, emphasizing that any retaliatory tariffs imposed by Canada would be met with equivalent tariffs from the US. This statement escalated tensions further, with Trudeau accusing the US president of attempting to destabilize the Canadian economy in a bid to annex Canada, a claim he categorically denied, asserting, "We will never be the 51st state."

US-China Trade War Intensifies

In addition to the ongoing tariff disputes with Canada and Mexico, the US is also intensifying its trade war with China. On Tuesday, a new 10% levy on Chinese imports took effect, adding to existing tariffs established during Trump's first term and those announced in the previous month. A spokesperson from China's foreign ministry stated that China would "fight to the bitter end" in this trade conflict, following their announcement of reciprocal tariffs on agricultural imports from the United States.

This complex web of international trade relations highlights the ongoing challenges and negotiations that shape the economic landscape in North America and beyond. As talks continue, the outcomes will have significant implications for trade policies and economic stability in the region.

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