US Commerce Secretary says more one-month tariff exemptions under USMCA 'likely'

WASHINGTON -- US Commerce Secretary Howard Lutnick said Thursday that more one-month tariff exemptions under USMCA (United States-Mexico-Canada Agreement) are "likely."

"It's likely that it will cover all USMCA compliant goods and services, so that which is part of President Trump's deal with Canada and Mexico are likely to get an exemption from these tariffs," Lutnick told CNBC.

"The reprieve is for one month," Lutnick said.

Lutnick's remarks came one day after White House Press Secretary Karoline Leavitt announced that US President Donald Trump is granting a one-month exemption to three major automakers from the newly imposed 25 percent tariffs on Mexico and Canada.

Levitt told reporters at a press briefing Wednesday that Trump has spoken with three companies?— Ford, General Motors, and Stellantis?— and they made this request. The president agreed to grant them a one-month tariff exemption.

The United States-Mexico-Canada Agreement (USMCA) is a trade agreement negotiated, signed, and ultimately enacted during Trump's first term, aimed at replacing the former North American Free Trade Agreement (NAFTA).

On Feb 1, Trump signed an executive order imposing a 25 percent tariff on products imported from Mexico and Canada, with a 10 percent tariff increase on Canadian energy products. On Feb 3, Trump announced a 30-day delay in implementing the tariffs on both countries and continued negotiations. According to this decision, the relevant tariff measures took effect on March 4.

Canada has announced retaliatory measures, while Mexico has signaled its intent to implement tariffs and other economic countermeasures. Businesses are increasingly concerned about the rising costs due to these tariffs, which could drive up consumer prices and contribute to an economic slowdown.

The stock market has shown significant volatility in response to the new tariffs, with investor uncertainty mounting as fears of potential economic repercussions grow.

The escalating tensions and economic uncertainties might have prompted Trump to reassess his trade policies.