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US official says possible Canada, Mexico tariff relief on 'categories' / Photo: © AFP/File
NYSE - LSE
US official says possible Canada, Mexico tariff relief on 'categories'
US Commerce Secretary Howard Lutnick said an announcement on Canada and Mexico tariffs was expected later Wednesday, signaling potential relief for specific sectors such as automobiles, a day after the steep levies took effect.
President Donald Trump's sharp 25 percent tariffs on US imports from Canada and Mexico -- with a lower rate for Canadian energy -- kicked in Tuesday, sending global markets tumbling.
Ottawa swiftly announced retaliatory tariffs, while Mexico City promised countermeasures were to come.
The US president has nominally cited illegal immigration and fentanyl trafficking in imposing the measures, though he frequently mentions trade imbalances when discussing the issue.
Trump is listening to "offers" from the North American neighbors, Lutnick told Bloomberg Television on Wednesday.
He said he expects an announcement to be made Wednesday afternoon.
Lutnick dismissed the possibility of lifting the levies completely, but said Trump is mulling market segments where he could provide temporary relief.
"The president gets to make the decision," Lutnick said. "But our expectation is that it'll be categories."
"It will be 25 percent but it'll be, there will be some categories left out. It could well be autos, could be others as well," he said.
Lutnick maintained, however, that reciprocal tariffs tailored to each US trading partner are still coming on April 2, as promised by Trump.
The levies could affect Mexico and Canada further, addressing their broader trade with the United States, he said.
Trump has vowed "reciprocal tariffs" targeting friend and foe to remedy potential practices deemed as unfair.
While some of these tariffs could come immediately, Lutnick told Bloomberg that others could take "over a month or two to come online."
This week, Trump also inked an order doubling an additional tariff rate on Chinese imports from 10 percent to 20 percent, also over the country's alleged role in illicit fentanyl entering the United States.
The latest US duties pile atop existing ones on various Chinese products.
Beijing hit back swiftly, condemning Washington's "unilateral imposition" of levies and promising 10 percent and 15 percent tariffs on a range of US agricultural imports.
Economists warn that tariff hikes stand to bog down economic growth and add to inflation in the world's biggest economy.
The mounting trade war could complicate Trump's stated aims of bringing cost of living relief to households.
O.Lis--GL
