US Commerce Secretary Lutnick: Trump may roll back Canada and Mexico tariffs tomorrow
US Commerce Secretary Howard Lutnick, during a televised interview on Fox News, hinted that US President Donald Trump may be preparing to pivot on his own tariffs less than 48 hours after imposing them.
Key highlights
If USMCA rules followed, Trump is considering relief.
We will see tariff changes on April 2nd with Canada and Mexico.
The administration will balance the us budget.
Trump is to move with Canada and Mexico, but not all the way.
The tariffs compromise announcement is likely tomorrow.
Trump is considering relief for USMCA-compliant goods.
Trump may roll back Canada and Mexico tariffs tomorrow.
However, the New York Times reported early Wednesday that President Trump signalled privately he'll stick with tariffs.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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