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globzette.com > Blog > Africa > Trump Set to Announce Tariff Reduction Deal with Canada and Mexico
Africa

Trump Set to Announce Tariff Reduction Deal with Canada and Mexico

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Last updated: March 6, 2025 9:29 am
Admin
Published: March 6, 2025
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US Tariffs Deal with Canada and Mexico
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US Commerce Secretary Howard Lutnick has indicated that President Donald Trump will “probably” announce a deal on Wednesday to reduce US tariffs on Canada and Mexico.

Contents
How Have Canada and Mexico Reacted to the US Tariffs?Did Trump Address the Tariff Issue in His Speech?How Has Canada Responded to the US Tariffs?How Have Businesses and Consumers Reacted?How Has the US Escalated Its Trade War with China?What Comes Next?

“Both the Canadians and Mexicans were on the phone with me all day today trying to show that they’ll do better” on reducing the flow of the synthetic opioid fentanyl into the US, Lutnick stated in an interview with Fox Business Network.

However, Canada’s Minister of Foreign Affairs, Mélanie Joly, has denied any communication about such a plan. She expressed concern over the unpredictability of the US administration’s decisions regarding trade and tariffs. “We have not been contacted, and we remain committed to defending our economic interests,” Joly said in a press briefing.

How Have Canada and Mexico Reacted to the US Tariffs?

Canada and Mexico imposed retaliatory import levies on the US after Washington’s 25% US tariffs on both nations came into effect on Tuesday. These tariffs have led to increased costs for manufacturers and businesses, sparking outrage from industry leaders and government officials in both countries.

Lutnick clarified that he expects the US tariffs to be lowered rather than paused. “I think [Trump’s] going to figure out, ‘you do more, and I’ll meet you in the middle some way.’ And we’re probably going to be announcing that tomorrow.”

When asked about the announcement, Joly stated, “US officials can say many things, but the only one that really takes a decision is President Trump.”

Did Trump Address the Tariff Issue in His Speech?

The US president dedicated a large portion of his speech to Congress on Tuesday to outlining his trade policies. However, he did not confirm whether he planned to reduce the US tariffs that came into effect this week. Instead, Trump announced plans to move ahead on April 2 with reciprocal tariffs on countries that he believes treat the US unfairly.

This stance has drawn mixed reactions from within the US itself, with some lawmakers and business groups warning that prolonged trade wars could hurt domestic industries. Economists have argued that the uncertainty surrounding trade policies is damaging investor confidence and disrupting supply chains.

How Has Canada Responded to the US Tariffs?

Earlier on Tuesday, Canadian Prime Minister Justin Trudeau criticized Trump’s US tariffs, calling them a “very dumb thing to do” and vowing a “relentless fight” to protect Canada’s economy. Trudeau emphasized that Canada has always been a fair trading partner and that these tariffs were unjustified.

Trudeau also announced retaliatory tariffs on US exports and warned that a trade war would be costly for both countries. “We are prepared to stand our ground,” he said, adding that Canada’s government would support industries affected by the tariffs.

Trump responded aggressively on his Truth Social platform, writing, “Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!”

Trudeau accused the US president of attempting to orchestrate “a total collapse of the Canadian economy because that will make it easier to annex us.”

“That is never going to happen. We will never be the 51st state,” he asserted to reporters. The Prime Minister also noted that Canada has strong trade ties with other nations and would explore alternative markets to mitigate the impact of US tariffs.

How Have Businesses and Consumers Reacted?

The impact of US tariffs is not just being felt at the governmental level—businesses and consumers are also facing rising costs. In Canada and Mexico, companies that rely on American raw materials are struggling to maintain competitive pricing.

In the US, industries that depend on imports from Canada and Mexico, such as the automotive and agricultural sectors, have expressed concerns. Farmers worry that retaliatory tariffs could limit their ability to sell products abroad, while car manufacturers warn that increased costs could lead to layoffs and higher prices for consumers.

Several industry leaders have urged the Trump administration to reconsider its approach, emphasizing that tariffs create more economic uncertainty than benefits. “Trade wars don’t benefit anyone in the long run,” said a spokesperson for the US Chamber of Commerce. “American businesses and workers will bear the brunt of these tariffs.”

How Has the US Escalated Its Trade War with China?

Washington intensified its trade war with Beijing on Tuesday by imposing a new 10% levy on Chinese imports, adding to existing tariffs from Trump’s first term and those announced last month.

A Chinese foreign ministry spokesperson reacted strongly, stating, “China will fight to the bitter end of any trade war,” following the announcement of China’s own tit-for-tat tariffs on US agricultural imports.

China has warned that continued trade hostilities could lead to further economic instability worldwide. Beijing has also strengthened trade relations with other global partners, reducing its reliance on US imports. “If the US continues down this path, it will only isolate itself from the global economy,” a Chinese government official stated.

What Comes Next?

As the world awaits Trump’s official announcement, tensions between the US, Canada, Mexico, and China continue to escalate. The coming days will determine whether a compromise can be reached or if further retaliatory actions will deepen global trade disputes.

Trade analysts suggest that a long-term solution will require negotiations that go beyond mere tariff adjustments. “We need to look at the bigger picture—what are the long-term goals of US trade policy? Are we strengthening relationships with our allies or alienating them?” said an international trade expert.

Meanwhile, businesses across North America are bracing for potential changes, hoping that an agreement can be reached before the economic damage becomes irreversible. Consumers, too, are closely watching developments, as increased tariffs often lead to higher prices for goods and services.

If Trump announces a reduction in US tariffs, it could ease tensions and restore stability in North American trade. However, with his unpredictable approach to policymaking, the outcome remains uncertain. For now, all eyes are on Washington, waiting to see what the next move will be in this ongoing trade battle.

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