Trump Threatens More Tariffs After Canada Retaliates, Commerce Secretary Lutnick Says Relief Could Be Announced Wednesday

Erica Kollmann

March 5, 2025

Benzinga

Canadian Prime Minister Justin Trudeau announced on Tuesday that Canada would impose retaliatory tariffs on U.S. imports, after President Donald Trump placed 25% levies on Canadian imports.

The Details: Trudeau said the measures include a 25% tariff on CA$30 billion worth of U.S. goods, effective immediately, with an additional CA$125 billion in U.S. products facing the same 25% tariff in three weeks.

Trump responded with a post from his Truth Social account that warned of increased tariffs equal to Canada's retaliatory measures.

"Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!" Trump wrote.

Trump's 25% tariffs on Mexico and Canada and an additional 10% on goods from China unfolded into a trade war with China and Canada both pledging retaliatory tariffs. Mexican President Claudia Sheinbaum stated that Mexico would respond with tariffs to be announced on Sunday.

The Dow Jones has shed more than 1300 points in the last two days as events have unfolded. The Nasdaq Composite ended Tuesday's session down by 0.4%, despite a rebound in big tech stocks like NVIDIA Corp. (NASDAQ:NVDA) and the S&P 500 has erased all of its post-election gains.

Late Tuesday afternoon, Commerce Secretary Howard Lutnick said there could be an announcement from the Trump administration regarding some relief for goods from Mexico and Canada covered under the North American Free Trade Agreement.

"Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they'll do better, and the president's listening, because you know he's very, very fair and very reasonable," Lutnick said in an interview with Fox Business.

"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 announcing that tomorrow, " Lutnick said.

What Else: President Trump is set to address Congress in the House chamber at 9 pm. ET Tuesday where he is expected to outline his administration’s key priorities, possibly touching on economic plans including tariffs and foreign relations.

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