Ever since President Donald Trump announced new tariffs on the United States' neighbors, financial markets have been reeling. His administration is now signaling that Trump may be willing to somewhat back off from the new duty fees soon if he can work out a deal.
NBC News reported Tuesday that Commerce Secretary Howard Lutnick is now indicating that Trump may be willing to meet the leaders of Canada and Mexico "in the middle" following two consecutive disastrous days of trading. Lutnick's announcement that Trump would "probably" consider a compromise came after Trump re-introduced 25% tariffs on Canada and Mexico after previously walking them back.
"Both the Mexicans and the Canadians are on the phone with me all day today, trying to show that they’ll do better," the commerce secretary told Fox Business. "And the president is listening because, you know, he’s very, very fair and very reasonable. So I think he’s going to work something out with them."
Trump's desire to bring Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum to the negotiating table comes on the heels of the Dow Jones Industrial Average dropping by more than 1,300 points over the past 48 hours. CNBC reported that the S&P 500 and the Nasdaq Composite also posted losses, with the former seeing its biggest one-day drop since December this week.
It initially appeared as if the U.S. was poised for a crippling trade war with Canada, as Trudeau said he intended to add a retaliatory 25 percent tariff to imported American goods. Trump responded that if Trudeau imposed new tariffs, he would hit Canada again with subsequent duty fees. Shark Tank star Kevin O'Leary told Fox News this week that the threat of a trade war spooked investors, as the higher prices that the tariffs would bring would result in consumer spending trending downward.
The threat of new tariffs could also result in Americans delaying expensive purchases, like buying new vehicles. Flavio Volpe, who is the president of the Automotive Parts Manufacturers' Association, recently said that the tariffs would not only raise prices, but also endanger jobs both in the U.S. and in Canada.
"[Manufacturers] can't go buy a crank shaft or car seats at a Walmart," Volpe told Canada's CTV News. "So, the industry, like it did in those first two incidents, will close within a week and that includes Ontario and Michigan all the way down to Kentucky, Alabama and Texas."
Reprinted with permission from Alternet.
