U.S. Futures, Mexican Peso, and Canadian Dollar Gain Amid Trade Policy Speculation

Market Fluctuations Following Tariff Announcements

Markets remained volatile on Tuesday as investors reacted to new tariffs imposed by the United States, Canada, and China. Early in the session, global equities declined, with U.S. futures trending downward. However, sentiment shifted in after-hours trading following remarks from U.S. Commerce Secretary Howard Lutnick, who suggested that the Biden administration may consider adjustments to tariff policies.

Speaking on Fox Business, Lutnick indicated that discussions were ongoing between the United States, Mexico, and Canada regarding the trade measures.

"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’s listening, because you know he’s very, very fair and very reasonable," Lutnick said.

While he did not specify any definitive changes, Lutnick suggested that tariffs could be modified rather than fully rolled back. He noted that businesses complying with the terms of the U.S.-Mexico-Canada trade agreement might be considered for tariff relief.

Following his remarks, U.S. equity futures rose in after-hours trading, while both the Mexican peso and Canadian dollar strengthened.

Impact of Tariffs on Global Markets

Earlier in the day, global markets faced selling pressure as investors assessed the impact of new trade restrictions. Asian and European markets closed lower, and U.S. equities saw declines before rebounding late in the session.

The tariff measures include a 25% levy on goods imported from Canada and Mexico, which took effect on Tuesday. In response, Canada announced reciprocal tariffs on $100 billion worth of U.S. imports, while Mexico is expected to unveil countermeasures soon.

Additionally, the United States increased tariffs on Chinese imports by 10%, bringing the total rate to 20%. China responded with new duties on U.S. agricultural products, as well as restrictions on exports to certain U.S. defense firms.

China’s Ministry of Finance announced new tariffs ranging from 10% to 15% on key U.S. agricultural exports:

• 15% tariffs on: chicken, wheat, corn, and cotton
• 10% tariffs on: sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy products

The ministry clarified that shipments made before March 10, 2025, and imported by April 12, 2025, would be exempt from the new tariffs.

Lynn Song, Chief Economist for Greater China at ING Bank, noted that China’s response remained measured. “The retaliation suggests that China is leaving room for negotiation,” she stated.

Billy Leung, an investment strategist at Global X ETF, pointed out that China’s tariffs primarily targeted agriculture rather than broader industries such as technology or automotive manufacturing. “That’s probably why Chinese stocks are rebounding instead of seeing steeper declines,” Leung observed.

Meanwhile, Dilin Wu, a research strategist at Pepperstone Group Ltd., commented that the immediate impact of China’s tariffs remains concentrated in specific sectors. “The measures are currently limited in scope,” Wu said.

Economic and Market Outlook

China’s Ministry of Finance issued a statement criticizing the latest U.S. tariff measures, arguing that they:

• "Damage the multilateral trading system,"
• "Increase costs for U.S. businesses and consumers," and
• "Undermine economic and trade cooperation between China and the U.S."

Analysts suggest that if Beijing introduces additional economic support measures—such as fiscal stimulus or industry-specific incentives—it could help mitigate the impact of tariffs on growth.

In the U.S., concerns about trade policy uncertainty have added to broader economic worries. Market participants will be closely monitoring upcoming policy announcements for further indications of whether trade tensions will escalate or if negotiations could lead to adjustments in tariff measures.

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