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Investing.com - President Donald Trump is likely to temporarily defer tariffs on goods and services from Canada and Mexico that are compliant with a trade agreement between the U.S. and its two North American neighbors, according to Commerce Secretary Howard Lutnick.
Speaking to CNBC, Lutnick said those items and services in compliance with the United States-Mexico-Canada trade pact -- a deal known as the USMCA that was negotiated during Trump’s first term in office -- will be excluded from the levies for one month.
The Canadian dollar and Mexico peso both hit session highs against the U.S. dollar following the comments. U.S. stock markets were lower in early trading.
On Wednesday, the White House said that Trump will exempt some automakers from his 25% duties on all non-energy goods from Canada and products imported from Mexico. Shares in the so-called Big 3 Detroit car manufacturers -- Ford (NYSE:F), General Motors (NYSE:GM) and Jeep-owner Stellantis (NYSE:STLA) -- rose in the wake of the announcement. Analysts had earlier flagged that these firms’ supply chains are spread across North America, leaving them heavily exposed to trade disruptions.
Officials also suggested that Trump would be willing to consider exemptions for other goods, including agricultural products, although the president reiterated his commitment to the levies.
In a post on his Truth Social platform, Trump said a phone call with Canadian Prime Minister Justin Trudeau had not convinced him that the situation was improving.
"He said that it’s gotten better, but I said, ’That’s not good enough,’" Trump wrote, adding that the call had "ended in a ’somewhat’ friendly manner!"
Trump has said the tariffs, which included a doubling of a trade tax on China to 20%, were in response to what he perceived as a lack of action taken by these countries to help stem the flow of migrants and illegal drugs into the U.S.