Trump ‘may meet Mexico, Canada in middle’ over tariffs: Lutnick

Donald Trump could roll back some of the tariffs he imposed on Canada and Mexico.

Donald Trump may meet Justin Trudeau and the Mexican president half way on tariffs. Picture: AFP

Donald Trump could dial down huge tariffs on Canada and Mexico this week while maintaining pressure on China, US Commerce Secretary Howard Lutnick has said, hours after Justin Trudeau attacked the United States’ “dumb” trade war.

“I think he’s going to work something out with them,” Howard Lutnick told Fox Business, adding the announcement would probably come on Wednesday (local time).

Mr Lutnick told Fox Business that Canadian and Mexican officials had been on the phone with him all day, with Mr Trump listening.

“Somewhere in the middle will likely be the outcome, the president moving with the Canadians and Mexicans, but not all the way.”

Earlier on Wednesday (AEDT) Canadian Prime Minister Justin Trudeau took aim at the US for launching a trade war against its “closest partner and ally” while publicly admonishing Mr Trump for what was a “very dumb thing to do”.

In response, Mr Trump said any retaliatory tariff from Canada would be met by a reciprocal tariff.

“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the US, our reciprocal Tariff will immediately increase by a like amount!” the President wrote on his Truth Social platform.

In extraordinary public remarks, Mr Trudeau had warned the introduction of tariffs had already seen markets slump and argued that inflation would rise all across America while inflicting unnecessary harm on US workers and families.

The tariffs would “sabotage” Mr Trump’s grand plan to usher in a new golden age for America, and work to the advantage of the enemies of the United States by dividing Washington from its traditional friends and partners.

Mr Trudeau also took aim at the United States for its tighter relations with Moscow, saying the trade war was occurring at the same time as Washington was “working positively with Russia, appeasing Vladimir Putin – a lying, murderous dictator”.

“Make that make sense,” he said. “Canadians are reasonable and we are polite. But we will not back down from a fight. Not when our country and the well being of everyone in it is at stake.”

The warning from Mr Trudeau came as Target chief executive Brian Cornell said that Americans could expect to face price hikes in coming days on strawberries, bananas and avocados from Mexico.

Speaking to CNBC, Mr Cornell said the retailer could be forced to increase prices as soon as this week and that “the consumer will likely see price increases over the next couple of days”.

“If there’s a 25 per cent tariff, those prices will go up,” he said.

Mr Trudeau said that Canada would retaliate against the US by “implementing 25 per cent tariffs against $155bn worth of American goods, starting with tariffs on $30bn worth of goods immediately and tariffs on the remaining $125bn of American products in 21 days time”.

Mr Trudeau said the new trade war would only undermine co-operation between Ottawa and Washington in tackling the scourge of fentanyl – one of the key justifications provided by the US President for his crackdown.

The Canadian Prime Minister also warned there was no justification for the tariffs and that the legal pretext used by Washington to introduce them – that Canada was “apparently unwilling” to help in the fight against illegal fentanyl – was “totally false”.

“Our border is already safe and secure. Far less than one per cent of fentanyl flows and less than one per cent of illegal crossings into the United States comes from Canada,” he said.

Despite this, Mr Trudeau said Canada had taken steps to address the concerns of the United States by “implementing an ambitious $1.3bn border plan” which included generational investments in new hi-tech solutions to stop the flow of fentanyl in its tracks.

“Critically, our actions are working. As the US Customs and Border Protection just acknowledged, there was a 97 per cent drop in fentanyl seizures from January compared to December to a near zero low of less than half an ounce seized in January.”

“We stepped up,” he said. “We did everything we promised. We stuck to our word, and we did it because we believe in working together to protect our citizens.”

In addition, Mr Trudeau said the tariffs would harm American national security by “impeding access to the abundant critical minerals, energy, building materials and fertilisers that we have and that the United States needs to grow and prosper”.

Addressing the American people, Mr Trudeau said that “we don’t want this. We want to work with you as a friend, an ally, and we don’t want to see you hurt either – but your government has chosen to do this to you”.

“As of this morning markets are down and inflation is set to rise dramatically all across your country. Your government has chosen to put American jobs at risk at the thousands of workplaces that succeed because of materials from Canada or because of consumers in Canada or both. They’ve chosen to raise costs for American consumers on everyday essential items like groceries and gas, on major purchases like cars and homes and everything in between.”

Mr Trudeau said the trade war would “first and foremost harm American families”.

Speaking directly to Mr Trump, Mr Trudeau said that – in the over eight years the two leaders had worked together – they had achieved “big things,” including signing a historic trade deal that created record jobs and growth in both nations.

“Now it’s not in my habit to agree with the Wall Street Journal. But Donald, they point out that even though you’re a very smart guy, this is a very dumb thing to do,” he said. “We two friends fighting is exactly what our opponents around the world want to see.”

Addressing Canadians, Mr Trudeau said the coming period would be tough but provided an assurance that “we’re all going to pull together”.

“We will use every tool at our disposal so Canadian workers and businesses can weather this storm,” he said. “We will be there as needed to help. But Canada, make no mistake, no matter how long this lasts, no matter what the costs, the federal government and other orders of government will be there for you.”

Mr Trudeau said the government would “defend Canadian jobs” and take measures to “prevent predatory behaviour that threatens Canadian companies because of the impacts of this trade war”.

“We will stand up for Canadians every single second of every single day because this country is worth fighting for.”