Commerce Secretary Lutnick predicts US will likely offer Canada one-month tariff pause on goods covered by free trade agreement
U.S. Commerce Secretary Howard Lutnick anticipates a one-month tariff reprieve for all products in compliance with the United States-Mexico-Canada Agreement (USMCA).
“It’s likely that [the reprieve] will cover all USMCA compliant goods and services, so that which is part of President Trump’s deal with Canada and Mexico are likely to get an exemption from these tariffs now,” Lutnick said during an interview with CNBC aired March 6.
Lutnick mentioned that the decision stems from Canada and Mexico’s significant efforts in combating fentanyl.
Lutnick stated that he predicts U.S. President Donald Trump will agree today that these USMCA-compliant goods will be exempted from tariffs until April 2. He emphasized that the focus post-reprieve will be on “fentanyl and the border,” as the administration aims to reduce fentanyl-related fatalities in the United States.
“Hopefully Mexico and Canada will have done a good enough job on fentanyl that this part of the conversation will be off the table and it will move just to the reciprocal tariff conversation,” Lutnick expressed.
A White House official, speaking on background to The Epoch Times, supported Lutnick’s stance, acknowledging that while the tariffs situation remains fluid, Lutnick’s comments are heading in the right direction regarding the USMCA pause.
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April 2 marks the day for a second round of U.S. tariffs, targeting countries that impose tariffs on the United States. These tariffs will correspond with the levels set by the countries.
Following Lutnick’s CNBC interview, Trump declared on his Truth Social platform that Mexico would not face tariffs for “anything that falls under the USMCA Agreement” until April 2, as a gesture of respect towards Mexican President Claudia Sheinbaum, citing collaborative efforts between the two countries on border security.
While Trump did not mention a similar reprieve for Canada regarding tariffs, he reiterated on a separate post his claims from the previous day that Prime Minister Justin Trudeau is leveraging the tariff situation for political gain.
Trudeau’s discussion with Trump on March 5 yielded no breakthrough on tariffs. On March 6, Trudeau confirmed ongoing talks with the U.S. administration but had no official announcements to make.
Canada Tariffs
On March 4, the U.S. imposed 10 percent tariffs on Canadian energy exports and 25 percent tariffs on all other Canadian products. In response, Ottawa retaliated with 25 percent tariffs on $30 billion worth of U.S. goods, with an additional $125 billion of imports to be tariffed after 21 days.
President Donald Trump stated on March 3 that Canada and Mexico had no more opportunities to evade tariffs and emphasized the influx of fentanyl from these countries into the U.S. He linked the tariffs to their efforts in curbing illegal immigration and drug trafficking, granting a 30-day tariff pause in early February after additional security measures were announced by Canada and Mexico.
In reaction to the U.S. tariffs on March 4, Trudeau questioned the validity of fentanyl as the primary reason for the tariffs and suggested Trump’s intentions were to destabilize Canada’s economy for potential annexation.
On March 5, the U.S. announced a one-month exemption on tariffs for the big three automakers—Ford, Stellantis, and General Motors—along with any cars from Canada and Mexico complying with the USMCA trade deal.
A day earlier, Lutnick hinted at a forthcoming modification to the tariff policy to seek a middle ground with Canada and Mexico, clarifying that there would be 25 percent tariffs, regardless of the middle ground being based on USMCA compliance.
Prime Minister Justin Trudeau engaged in a call with Trump on March 5 to address the tariff situation. Following the call, Trump, on Truth Social, expressed dissatisfaction with Canada’s actions on fentanyl and hinted at continuing the trade war into the foreseeable future during a subsequent press conference.
