In an appearance on Fox Business News on Tuesday afternoon, U.S. Commerce Secretary Howard Lutnick said President Donald Trump is going to “work something out” with Mexico and Canada and meet the two countries “in the middle.”
Trump escalated trade tensions Tuesday by imposing tariffs on America’s three largest trading partners, prompting swift retaliation from Mexico, Canada and China. The move sent financial markets reeling, heightening concerns over renewed inflation and creating widespread uncertainty for businesses.
U.S. President Donald Trump, accompanied by Commerce Secretary Howard Lutnick (L) takes a question from a reporter in the Roosevelt Room of the White House on March 3, 2025, in Washington, DC. U.S. President Donald Trump, accompanied by Commerce Secretary Howard Lutnick (L) takes a question from a reporter in the Roosevelt Room of the White House on March 3, 2025, in Washington, DC. AFP/Getty Images
Why It Matters
Shortly after midnight, Trump imposed 25 percent tariffs on imports from Mexico and Canada, though he limited the rate to 10 percent on Canadian energy. He also doubled last month’s tariff on Chinese goods, raising it to 20 percent.
Trump had threatened tariffs over problems with the border, such as the trafficking of drugs like fentanyl and illegal immigration.
In response, Beijing hit back with tariffs of up to 15 percent on a broad range of U.S. agricultural exports and expanded its export controls and restrictions to include about two dozen additional American companies.
Canadian Prime Minister Justin Trudeau announced that Canada would impose retaliatory tariffs on more than $100 billion worth of U.S. goods within 21 days.
Mexican President Claudia Sheinbaum announced that Mexico will respond to the new tariffs with its own retaliatory measures. Sheinbaum stated that she will reveal the specific products targeted on Sunday, a delay that may suggest Mexico is still seeking to de-escalate Trump’s trade war.
What To Know
Later on Tuesday, Commerce Secretary Howard Lutnick said on Fox Business News that the U.S. would likely meet Canada and Mexico “in the middle,” with an announcement coming as soon as Wednesday.
Lutnick said, “Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better, and the president is listening because you know he’s very, very fair and very reasonable. So, I think he’s gonna work something out with them. It’s not gonna be a pause. None of that pause stuff. But I think he’s gonna figure out, you do more, and I’ll meet you in the middle.”
Lutnick: “Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better, and the president is listening because you know he’s very very fair and very reasonable. So I think he’s gonna work something out with them. It’s not gonna… pic.twitter.com/qjzYHzipQr
— Aaron Rupar (@atrupar) March 4, 2025
Trudeau on Tuesday criticized U.S. tariffs as “very dumb,” accusing President Trump of appeasing Russia while igniting a trade war with Canada.
In a candid news conference during his final days in office, Trudeau announced that Canada would impose retaliatory tariffs on over $100 billion worth of American goods in response to Trump’s 25% tariffs.
What People Are Saying
Trudeau addressed Trump directly by his first name during his press conference: “I want to speak directly to one specific American, Donald,” Trudeau said. “It’s not in my habit to agree with the Wall Street Journal, but Donald, they point out that even though you’re a very smart guy, this is a very dumb thing to do.”
Sen. Susan Collins, R-Maine, explained that much of the state’s lobsters and blueberries are processed in Canada and then sent back to the U.S.: “Maine and Canada’s economy are integrated.”
Sen. Majority Leader John Thune, R-SD, said he’s ready to give Trump’s tariffs a chance: “What I’m willing to do is give the president some latitude to try and accomplish the objective he seeks to get done here,” Thune said about the administration’s goal of reducing the flow of fentanyl at the borders.
The Republican leader said he’s in a “different place on tariffs” than some of his colleagues and even the White House. “But at the end of the day, it’s really about, trying to achieve the desired result.”
What Happens Next
The stock market fall has created concern around where the market goes from here. It is far too early to tell whether the tariffs will have a positive effect on domestic manufacturing, or if businesses will suffer due to having to pay more for items from overseas.
Update: 3/4/25, 5:04 p.m. ET: This article has been updated with additional information.
Update: 3/4/25, 5:19 p.m. ET: This article has been updated with additional information.
Update: 3/4/25, 5:35 p.m. ET: This article has been updated with additional information.
