Trump may scale back some tariffs on Canada and Mexico, says US Commerce Secretary

United States Secretary of Commerce Howard Lutnick on Tuesday hinted that President Donald Trump could consider some tariff relief for Canada and Mexico.

He said that the President is going to "figure out" which would involve reducing some of the 25% tariffs on imports from Canada and Mexico.

"So I think he's going to work something out with them — it's not going to be a pause, none of that pause stuff, but I think he's going to figure out: you do more and I'll meet you in the middle some way and we're going to probably announce that tomorrow," he added.

Lutnick's remarks come after the US markets reacted sharply to the 25% tariff on imports from Canada and Mexico, which became effective Tuesday.

The S&P 500 index declined 1.2%, ending at 5,778, while Dow Jones slipped 1.5% to 42,520. Nasdaq Composite settled at 18,285, down 0.3%.

Meanwhile, in retaliation to the US tariff, Canadian Prime Minister Justin Trudeau said his country would implement 25% tariffs on $155 billion of American products.

"Starting with $30 billion worth of goods immediately, and the remaining $125 billion in 21 days' time," he said.

Mexico has not announced any retaliatory measures yet, but President Claudia Sheinbaum has stated that the country will respond to US tariffs with its own tariffs on American goods.

The 10% tariff Trump imposed on Chinese imports in February was increased to 20%, prompting Beijing to retaliate with tariffs of up to 15% on US farm exports.