(Updates with morning prices)

By Pranav Kashyap

March 5 (Reuters) - Canada's main stock index recovered

on Wednesday, helped by the news of U.S. President Donald

Trump's administration considering reducing the stringent

tariffs on Canadian and Mexican imports.

At 10:20 a.m. ET (1520 GMT), the S&P/TSX composite index

was up 0.5% at 24,677.07, after falling in the past

two sessions.

U.S. Commerce Secretary Howard Lutnick said on Tuesday

the government was contemplating easing the 25% tariffs on

Canadian and Mexican imports for products that adhere to the

trade pact negotiated with the two nations during Trump's first

term.

Trump was weighing possible sectors, such as

automobiles, that could see some potential relief, Lutnick said

during an interview on Bloomberg TV.

An announcement concerning the tariffs was expected later in

the day, he added.

"People are anticipating that maybe the U.S. will back off

on tariffs a little bit. Right now, the markets are back up, but

if they fall through then it could go right back down," said

Colin Cieszynski, chief market strategist at SIA Wealth

Management.

"It's all being politically driven and until we get a better

sense, we're in for more volatility."

Trump escalated a global trade war on Tuesday after he

imposed the tariffs on top U.S. trade partners, citing

ineffective border controls.

On the economic data front, Canada's PMI data fell to 46.6

in February from 49 a month earlier, revealing a deepening

downturn in the country's services sector.

Meanwhile, U.S. private payrolls posted their slowest growth

in seven months in February.

Sector-wise, materials emerged as the standout

performer on Wednesday, climbing 1.7% as copper prices rose amid

intensifying concerns over U.S. import tariffs.

China's new stimulus measures, Germany's infrastructure fund

plans and a weaker dollar also boosted the metal's broader

market.

The energy sector slipped 1.6%, becoming the day's

worst performer, as oil prices tumbled over 2% amid worries

about OPEC+'s plans to proceed with output increases in April.