Commerce Secretary Howard Lutnick suggested new action is coming from President Donald Trump to issue exemptions to the sweeping 25% tariffs he imposed Tuesday on most goods imported into the U.S. from Mexico and Canada.
No official decision has been made, but Lutnick said on CNBC that he was expecting an announcement later today on a broad exemption that would apply to goods compliant with the USMCA trade deal reached during Trump’s first term. The commerce secretary said the exemption would last for one month and that additional tariffs would come on April 2, when Trump has said he will unveil a broad swath of reciprocal tariffs.
“My expectation is the president will come to the agreement today, and hopefully we will announce this today, that USMCA-compliant goods will not have a tariff over the next month until April,” Lutnick said in an interview today on CNBC.
On Tuesday, Trump began charging U.S.-based companies importing goods from Canada and Mexico a 25% tariff for bringing those goods into the U.S. The move triggered a sell-off in stocks, and companies warned the added costs from the tariffs could drive prices higher on thousands of products, including alcohol, fresh produce, cars and new homes.
A day after the tariffs were put in place, the White House said it would begin exempting autos from the tariffs if the companies complied by standards in the USMCA deal, which automakers said they have been doing. The tariffs could have added $4,000 to $10,000 to the cost of cars made in North America, according to estimates from Anderson Economic Group.
In announcing the tariffs, Trump said he was using them as a tool to pressure Canada and Mexico into doing more to stop the flow of fentanyl into the U.S., though less than 1% of fentanyl seized at the U.S. border was coming from Canada. Lutnick had said the tariffs would stay in place until deaths from fentanyl declined, but he also said today that Trump was pleased with the work Canada and Mexico have pledged to continue doing around fentanyl.
“Canada has done an enormous amount, they’ve offered us an enormous amount of work on fentanyl and so is Mexico,” he said.
Trump spoke Wednesday with Canadian Prime Minister Justin Trudeau and is scheduled to speak Thursday with Mexican President Claudia Sheinbaum.
“If you lived under Donald Trump’s U.S., Mexico and Canada agreement, you will get a reprieve from the tariffs now,” Lutnick said. “If you chose to go outside of that you did so at your own risk, and today is when that reckoning comes.”
The USMCA trade deal, which Trump heralded during his first term as a negotiating victory, allows goods to move between the three countries tariff-free if they meet certain qualifications designating them as made in North America.
