President Trump addresses reporters at the White House, flanked by Commerce Secretary Howard Lutnick. Photo: Samuel Corum/Sipa/Bloomberg via Getty Images
The U.S. may pull back on some tariffs against Canada and Mexico later Wednesday in a limited fashion, Commerce secretary Howard Lutnick said.
Why it matters: Financial markets rallied late Tuesday, when Lutnick hinted at a tariff rollback, but turned negative again Wednesday after he made clear any relief would only be partial, and perhaps temporary at that.
- Fears of a global trade war have weighed heavily on U.S. financial markets this week, after the U.S. imposed 25% tariffs against its two largest trading partners.
- The “Trump bump” that boosted stocks after his election has now been erased, with the S&P 500 lower than when he won last year.
What they’re saying: “There are going to be tariffs, let’s be clear, but what he’s thinking about is which sections of the market that can maybe — maybe — he’ll consider giving them relief until we get to of course April 2,” Lutnick said in a Bloomberg TV interview.
- On April 2 the U.S. is expected to impose reciprocal tariffs on most countries. The size of those levies is still unclear.
- Trump and Lutnick have both said those tariffs will stack on top of any others imposed or coming.
Zoom in: The 25% tariffs on Canada and Mexico (and increased 20% tariffs on China) are expected to have a significant impact on prices, and potentially stoke a resurgence of inflation.
- The Yale Budget Lab, after factoring in potential foreign retaliation and consumers switching to cheaper goods, still estimates the tariffs will cost the typical household $1,100 this year alone.
- Trump acknowledged in his address to Congress Tuesday that tariffs would cause “a little disturbance,” a change in his long-stated position that tariffs don’t cause prices to rise.
Editor’s note: This is a breaking news story. Check back for updates.
