U.S. President Donald Trump may announce a deal with Canada and Mexico on Wednesday that sees the countries “meet in the middle” on tariffs, his commerce secretary said after the president launched a trade war Tuesday.
U.S. Commerce Secretary Howard Lutnick told Fox News Trump will “work something out with them” after imposing 25 per cent tariffs on Canadian and Mexican goods and 10 per cent levies on Canadian energy. Canada launched retaliatory tariffs shortly afterward, with Mexico promising to do the same.
“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 is listening because, you know, he’s very very fair and very reasonable,” Lutnick said. “So I think he’s gonna work something out with them.
“It’s not gonna be a pause. None of that pause stuff. But I think he’s gonna figure out, ‘You do more, and I’ll meet you in the middle someway,’ and we’re going to probably be announcing that tomorrow.
“So somewhere in the middle will probably be the outcome, the president moving with the Canadians and Mexicans, but not all the way,” he said.
A Canadian government source told Global News that Finance Minister Dominic LeBlanc spoke with Lutnick on Tuesday, hours after Washington announced the tariffs.
Prime Minister Justin Trudeau said Tuesday the U.S. had launched a “dumb” continental trade war and Canada has been forced to push back. Canada is introducing immediate 25 per cent retaliatory tariffs on $30 billion worth of American products, and will expand them to cover another $125 billion in U.S. goods in 21 days.
Get daily National news
Get the day’s top news, political, economic, and current affairs headlines, delivered to your inbox once a day.
Lutnick criticized Trudeau’s rhetoric, noting the prime minister is set to resign after a new Liberal party leader is elected on Sunday.
“Hopefully they’ll elect someone who’s clever, who comes down and says to Donald Trump, ‘We want to do business with you, we want to do business fairly, and we can get rid of all this nonsense,’” he said.
“What happened to the USMCA? I’ll tell you what happened: the Canadians like to cheat.”
Trump negotiated the United States-Canada-Mexico Agreement to replace NAFTA during his first administration — including using tariffs to get concessions from Canada and Mexico. The free trade pact is set to be reviewed next year.
Lutnick had previously suggested Tuesday’s tariffs might not be set at 25 per cent in an interview with Fox News on Sunday, but Trump ultimately kept the previously announced rate in place.
Before and after the tariffs came into effect, Lutnick and other Trump administration officials insisted they are directly linked to the issue of fentanyl pouring into the U.S. from Canada and Mexico.
Trump imposed the tariffs using the International Economic Emergency Powers Act, a national security statute that gives him authority to control economic transactions, after he declared an emergency on fentanyl at the northern border.
Less than one per cent of fentanyl that enters the U.S. comes from Canada, according to government data from both countries. U.S. Customs and Border Protection data shows fentanyl seizures at the Canada-U.S. border have fallen steadily from a record peak last summer, with less than 14 grams seized in January.
Ottawa rapidly boosted resources at the border after Trump made his original tariff threat. Canada named a new “fentanyl czar,” listed Mexican cartels as terrorist groups and launched a Canada-U.S. joint strike force. Canadian law enforcement agencies have been publicly proclaiming drug busts.
Canadian officials have highlighted those measures and data showing falling fentanyl seizures in talks with the Trump administration over the past month, but those talks did not appear to sway the president.
Vice-President JD Vance told reporters on Capitol Hill on Tuesday that “Canadians have not been serious about stopping the drug trade.”
“People will sometimes say, ‘Well if you look at the numbers, the Mexicans send way more fentanyl into the United States then the Canadians do.’ The Canadians have allowed a lot of fentanyl to come into the country,” Vance said. “It’s not a defence to say more has come from Mexico.”
Vance said Trump will have conversations with “the Canadians.”
Lutnick said in a separate interview with CNBC on Tuesday that Trump wants to see a significant drop in fentanyl-related deaths in the U.S. before considering lifting the tariffs.
“This is not a trade war, this is a drug war,” he said. “Hopefully they understand that.”
White House Press Secretary Karoline Leavitt told Fox News Monday evening that the administration has “certainly seen some cooperation from Mexico and also from Canada” but pointed to high levels of fentanyl seized in past years at both American borders.
“These countries have to be held accountable for that,” she said.
—With files from the Canadian Press
© 2025 Global News, a division of Corus Entertainment Inc.
Trump may meet Canada, Mexico ‘in the middle’ on tariffs Wednesday: Lutnick
