US Secretary of Commerce says Trump may roll back tariffs on Canada & Mexico tomorrow

Donald Trump is expected to announce a tariff rollback deal with Canada and Mexico as early as Wednesday, Commerce Secretary Howard Lutnick said Tuesday.

Speaking on Fox Business, Lutnick confirmed that both countries had been negotiating nonstop with U.S. officials to scale back the 25% tariffs Trump had just reinstated on their exports.

“Both the Mexicans and the Canadians are on the phone with me all day today, trying to show that they’ll do better,” Lutnick said. He suggested that Trump might be open to meeting them halfway, but made it clear the U.S. wouldn’t drop the tariffs entirely. “We’re going to probably be announcing that tomorrow.”

Trump’s tariffs shake markets and businesses brace for impact

The announcement comes just after Trump reimposed sweeping tariffs on Canadian and Mexican imports, ending a one-month pause that temporarily eased tensions. The tariffs took effect Tuesday, and their impact was immediate—the stock market plunged for a second straight day as investors panicked over a potential trade war.

Trump has long defended tariffs as a negotiation weapon, arguing that Canada and Mexico haven’t done enough to stop drugs and crime from flowing into the U.S. Now, with the economic effects setting in, the administration seems ready to adjust its stance—but not completely.

Lutnick’s comments suggested that any deal would require Canada and Mexico to step up their efforts in areas that Trump has criticized. “The President is listening because, you know, he’s very, very fair and very reasonable,” Lutnick said, adding that Mexico and Canada would need to “do more” before any relief is granted.

The 25% tariffs on Canadian and Mexican imports—with an additional 10% tariff on Canadian energy—are expected to raise prices across multiple industries. Businesses that depend on imports from both countries are now scrambling to figure out how to offset costs.

Consumers could feel the squeeze on everything from gas to groceries

The economic impact of these tariffs will hit Americans directly, economists warned Tuesday. The U.S. imports nearly half of its foreign oil from Canada, and tariffs on that supply will drive up fuel costs, according to the Peterson Institute for International Economics.

Travis Tokar, a professor at Texas Christian University, explained that tariffs cause unexpected ripple effects across industries. “A fast-food chicken sandwich might not seem connected to Canadian or Mexican imports, but if the aluminum foil used in its packaging comes from one of those countries, the cost goes up,” Tokar said.

Everyday goods will get more expensive, including fruits and vegetables from Mexico—a major supplier to U.S. grocery stores. Target CEO Brian Cornell warned Tuesday that prices for strawberries, avocados, and bananas could rise within days. A Yale Budget Lab analysis estimated that food prices will climb nearly 2% overall, while fresh produce could spike by almost 3%.

Even bigger problems loom in the automobile industry, where manufacturers depend on cross-border supply chains. A car built in Alabama might seem unaffected by these tariffs—until you realize many of its parts come from Mexico and Canada.

Ford, General Motors, and Stellantis are already preparing for higher production costs, according to a Bank of America Global Research report. Tariffs could add nearly $6,000 to the price of a new car, according to an estimate from investment bank Benchmark Co. And higher car prices mean higher insurance premiums, making vehicle ownership more expensive across the board.

Construction is also taking a hit. The U.S. imports more than 40% of its wood products from Canada, which means that anyone planning to renovate or build a home this year is about to pay a lot more. “If you’re doing a renovation this summer, you’re kind of out of luck,” Lovely said.

Canada and Mexico hit back with their own tariffs

Trump’s tariffs haven’t gone unanswered. Within hours of the announcement, Canada and Mexico retaliated with tariffs of their own, targeting billions of dollars worth of U.S. exports.

Canadian Prime Minister Justin Trudeau confirmed Tuesday that Canada would impose a 25% levy on C$30 billion worth of U.S. imports, effective immediately. He warned that in 21 days, Canada would slap even harsher tariffs on another C$125 billion in American goods.

Mexico is also fighting back. Officials there announced that their tariffs would target key U.S. industries, especially agriculture, which relies heavily on exports. American farmers could lose crucial business as Mexican buyers shift to other suppliers.

Alexander Field, an economics professor at Santa Clara University, said these retaliatory tariffs are unavoidable. “You don’t put these kinds of tariffs in place without expecting retaliation, and that’s happening right now,” he said.

For businesses that depend on exports, this is bad news. “These tariffs will increase the price of imported goods,” Field explained. And since domestic producers no longer have to compete with lower-cost imports, they can raise their prices too.

That leaves Americans paying more—whether they’re buying foreign or domestic products. Some businesses might try to absorb the costs rather than immediately raise prices, but that means less money to invest in expansion, hiring, and new technology. “Even when the impact isn’t visible right away, it still weakens the economy,” Tokar said.

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