US Commerce Secretary Howard Lutnick indicated on CNBC that the United States is likely to extend tariff relief to all USMCA-compliant goods and services, potentially easing the steep tariffs on imports from Canada and Mexico for one month. This comes after the White House granted automakers temporary reprieve from tariffs on products ranging from lumber to avocado imports.
Trump’s 25 percent tariffs on imports from Canada and Mexico, with a lower rate for Canadian energy, took effect on Tuesday, leading to retaliatory measures from both Ottawa and Mexico. Canadian Prime Minister Justin Trudeau warned that the trade war could persist “for the foreseeable future” until the US tariffs are fully lifted.
The tariff relief, which could extend for one month, may offer some short-term respite; however, after that period, Canadian and Mexican goods could face reciprocal tariffs. Trump has promised to provide further details on April 2.
These developments come amid a record surge in the US trade gap, which reached $131.4 billion in January—the widest monthly deficit since 1992—driven by a 10 percent increase in imports. On social media, Trump highlighted the massive trade gap and vowed to address it.
The International Monetary Fund has cautioned that these tariff measures could have significant adverse economic impacts on both Canada and Mexico. Analysts noted that businesses appear to be front-loading shipments in anticipation of potential future tariff increases, a trend further evidenced by a notable spike in gold imports as companies repatriate their holdings.
Since returning to office, President Trump has pursued an aggressive tariff strategy, targeting not only Canada, Mexico, and China over issues like illegal immigration and fentanyl concerns but also other sectors, including semiconductors and automobiles. This move is part of his broader approach to implement “reciprocal tariffs” tailored to each US trading partner, aiming to address trade practices deemed unfair by Washington.
