President Donald Trump is expected to announce a compromise with Canada and Mexico as early as Wednesday, according to Commerce Secretary Howard Lutnick. The anticipated deal aims to scale back Trump's recently imposed 25% tariffs on imports from these two key U.S. trading partners.
The Trump administration had reimposed these sweeping tariffs on Tuesday after a month-long pause, which has stirred concerns of a potential trade war. Investors' fears were reflected in the U.S. stock market's performance, which ended with a second consecutive day of significant declines.
"We're going to probably be announcing that tomorrow," said Howard Lutnick, indicating that the announcement would not merely be another pause in tariff enforcement.
The proposed agreements are expected to include Canada and Mexico committing to "do more," as described by Lutnick. In return, President Trump would agree to meet them "in the middle some way," potentially scaling back at least part of the tariffs.
"Both the Mexicans and the Canadians are on the phone with me all day today, trying to show that they'll do better," Lutnick noted, highlighting ongoing negotiations.
The reimposition of tariffs has raised alarms across financial markets, fueling fears that Trump's aggressive trade policies might lead to broader economic repercussions. The stock market's downturn reflects investor anxiety over the possibility of a crippling trade war.
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