Trump 2nd term live updates: Trump defends tariffs, declines to comment on Ukraine aid

Commerce Secretary Howard Lutnick suggested Trump might reduce tariffs on Mexico and Canada tomorrow during an interview on Fox News Tuesday evening. Lutnick said Trump is looking at a way to "meet" Canada and Mexico "in the middle" but added it is not a pause on the tariffs.

"It's not going to be a pause -- that pause stuff, but I think he's going to figure out, you do more, and I'll meet you in the middle some way, and we're going to probably be announcing that tomorrow," he said, noting that he spoke with both Mexican and Canadian officials Tuesday. "So somewhere in the middle will likely be the outcome, the president moving with the Canadians and Mexicans, but not all the way."

Lutnick added that the issue at hand is still fentanyl coming into the United States through the borders with Mexico and Canada.

-ABC News' Molly Nagle and Michelle Stoddart

The IRS is preparing to cut as much as half of its staff as part of the Trump administration’s latest round of cuts to the federal workforce, multiple sources told ABC News.

The agency, which has roughly 100,000 employees, has not finalized its plans, which will be submitted as part of the Treasury Department “reduction in force” plan to the Trump administration later this month.

It’s unclear how or when the next round of layoffs will take place at the IRS amid the tax season. The agency has continued to lay off workers but has said it will not remove staffers who directly process tax returns this spring.

-ABC News' Benjamin Siegel, Olivia Rubin and Will Steakin

President Donald Trump's counselor to the president, Alina Habba, questioned the capabilities of some veterans affected by the federal government layoffs, saying they may not be "fit to have a job at this moment."

She offered limited sympathy to those who have lost their jobs amidst the cuts while speaking on the White House's North Lawn on Tuesday.

"That's something the president has always cared about -- anybody in blue, anybody that serves this country. But at the same time, we have taxpayer dollars, we have a fiscal responsibility to use taxpayer dollars to pay people that actually work," Habba said.

"That doesn't mean that we forget our veterans by any means," she continued. "We are going to care for them in the right way, but perhaps they're not fit to have a job at this moment or not willing to come to work. And we can't, you know, I wouldn't take money from you and pay somebody and say, 'Sorry, you know, they're not going to come to work.' It's just not acceptable."

-ABC News' Kelsey Walsh

The Trump administration has listed hundreds of federal properties across nearly every state for possible sale in a new phase of President Donald Trump's campaign to shrink the federal government, its workforce and footprint in Washington, D.C.

The list posted on the website of the General Services Administration includes some of Washington's iconic and most centrally located federal buildings, including many in the "Monumental Core" of the city around the Washington Mall -- from the Department of Agriculture and the Labor Department to the Justice Department, FBI Headquarters and Old Post Office.

-ABC News' Benjamin Siegel, Kelsey Walsh and Cherisse Halsall