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Trade shift? Trump mulls easing Canada, Mexico tariffs, says Lutnick

by admin March 5, 2025
March 5, 2025
Trade shift? Trump mulls easing Canada, Mexico tariffs, says Lutnick

The United States may revise its trade policies with Canada and Mexico, as US Commerce Secretary Howard Lutnick confirmed that President Donald Trump is considering rolling back certain tariffs.

The potential move, expected as early as tomorrow, follows negotiations with officials from both countries. Trump is not expected to eliminate tariffs.

Instead, adjustments will likely be conditional on Mexico and Canada addressing key concerns raised by the administration.

Lutnick’s comments come at a critical moment for financial markets, which have been reacting sharply to trade policy uncertainty.

The largest technology stock ETF surged nearly 1% in late trading, while index futures rebounded from earlier declines. The tariff debate has also had a ripple effect on cryptocurrency markets, which saw sharp swings following the announcement.

Trade tensions ease, but tariffs remain a tool

While Trump has signalled a willingness to adjust tariffs, Lutnick stressed that the administration still views them as a critical negotiation tool.

The 25% tariffs on Canadian and Mexican imports, which have been in place for months, are not expected to be removed entirely. Instead, Trump may introduce modifications aimed at addressing concerns from both trade partners.

Lutnick did not provide exact details on the potential changes but indicated that Canada and Mexico have been actively engaging with the US government to seek a resolution.

He acknowledged that the administration is open to “meeting in the middle” but emphasised that both countries would need to address specific issues raised by the White House.

These remarks came ahead of Trump’s scheduled primetime address to Congress, where he is expected to outline his economic strategy, including his approach to international trade.

The president has repeatedly stated that tariffs help protect US industries and reduce the trade deficit, despite concerns from economists and business leaders about their long-term impact.

Expanding the trade war

While Trump appears open to revising trade measures against Canada and Mexico, he has remained firm on tariffs against China.

The US raised levies on Chinese imports to 20%, with Beijing responding by imposing 15% tariffs on US farm goods, effective next week.

The ongoing trade battle has added pressure on American manufacturers and exporters, particularly in the agriculture and technology sectors.

Beyond China, Trump has also turned his attention to the European Union. He has threatened new tariffs on European goods, further escalating trade tensions.

Analysts warn that such a move could trigger retaliatory actions from the EU, potentially destabilising global trade and financial markets.

Investors have been closely monitoring these developments, with stock prices fluctuating in response to tariff-related announcements.

Crypto markets react to trade policy shifts

The uncertainty surrounding US trade policy has not only impacted equities but also sent shockwaves through cryptocurrency markets.

Bitcoin, which initially plummeted over 9% to $83,000 following Lutnick’s announcement, has since rebounded and is now trading at $87,723, marking a 4% gain in the last 24 hours.

Other major cryptocurrencies, including Ethereum, XRP, Solana, and Cardano, have also recovered, rising by 5%, 9%, 5%, and 22%, respectively.

The broader cryptocurrency market is now valued at nearly $4 trillion, reflecting a 4% increase over the past day.

Crypto-related stocks have also seen gains, with MicroStrategy (MSTR) rising 9.55%, Coinbase (COIN) up 3.22%, and Marathon Digital (MARA) gaining 1.34%.

The link between trade policies and crypto market movements underscores the growing role of digital assets in global finance.

Investors are increasingly using cryptocurrencies as a hedge against economic uncertainty, with Bitcoin and other major tokens reacting to geopolitical events like traditional assets.

As Trump prepares to address the nation, traders and policymakers alike will be watching closely for further details on his tariff strategy.

The post Trade shift? Trump mulls easing Canada, Mexico tariffs, says Lutnick appeared first on Invezz

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