The US trade war has taken a significant turn, with new tariffs imposed on Canada and Mexico. The sweeping levies, which were announced by President Trump on March 5, have resulted in the value of the dollar taking a hit. China duties have also been doubled.
Canada and Mexico have responded angrily to the measures, with Canadian Prime Minister Justin Trudeau striking a tough tone against the US actions. Meanwhile, Mexican Secretary of Economy Graciela Sheinbaum said that her country would announce its response on Sunday.
The impact on US stocks was initially negative, but they trimmed their losses as the session progressed. Just as it seemed like the trade war news had concluded, US Commerce Secretary Howard Lutnick appeared on Fox Business to provide further insights into the situation.
According to Lutnick, if the rules of the USMCA (United States-Mexico-Canada Agreement) were followed, he was considering relief from some of the tariffs. He also stated that the China trade war is like a “drug war” rather than a traditional trade dispute. The Commerce Secretary hinted at potential changes to tariffs on April 2 and suggested that Trump would move in tandem with Canada and Mexico but might not meet all their demands.
Lutnick predicted that a compromise announcement regarding the tariffs could happen tomorrow, while also mentioning that President Trump may roll back some of the measures on his own.
Source: https://www.bloomberg.com/news/live-blog/2025-03-04/trump-tariffs-china-canada-mexico