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Trump Administration Considers Tariff Relief for USMCA-Compliant Products, Lutnick Reports

The Trump administration is weighing relief from the 25% tariffs on Canadian and Mexican imports for products compliant with the USMCA trade pact. Commerce Secretary Howard Lutnick revealed discussions aimed at exemptions tied to the 2020 agreement, primarily targeting automakers. Potential changes to the tariffs remain uncertain, pending Trump's decision.

The proposed deal could alleviate challenges for automakers facing substantial cost hikes due to the levies. An exemption, contingent on adherence to USMCA's regional content criteria, would benefit Detroit automakers Ford, General Motors, and Stellantis, as well as certain foreign brands like Honda and Toyota, while imposing tariffs on competitors manufacturing cars in Mexico.

Additionally, the negotiations include the elimination of the 10% tariff on Canadian energy imports meeting USMCA guidelines. Lutnick indicated that adherence to USMCA regulations would determine tariff relief, with Trump considering the agreement as a middle ground for Canada and Mexico.

Although no final decisions have been made, potential modifications to the tariffs are expected, aimed at supporting USMCA-compliant vehicles and parts production, per industry requests and trade union advocacy. Trump highlighted the importance of policies fostering growth during his congressional address, emphasizing their positive impact on the auto industry.