WASHINGTON: US President Donald Trump is expected to decide on Monday what levels of tariffs he will impose early on Tuesday on Canada and Mexico amid last-minute negotiations over border security and efforts to halt the inflow of fentanyl opioids.
Trump has vowed to impose 25% tariffs on all imports from Canada and Mexico, with 10% for Canadian energy.
CEOs and economists say the action, covering more than $900 billion worth of annual US imports from its southern and northern neighbours would deal a serious setback to the highly integrated North American economy.
The tariffs are scheduled to take effect at 12:01 a.m. EST (0501 GMT) on Tuesday.
Commerce Secretary Howard Lutnick on Sunday signalled that Trump may not impose the full amount of tariffs, saying that the president would determine their exact levels.
Mexico and Canada have “done a reasonable job” securing their US borders and Trump is considering what the final tariff levels should be, Lutnick told Fox News.
“He’s sort of thinking about right now how exactly he wants to play with Mexico and Canada, and that is a fluid situation. There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are, we’re going to leave that for the president and his team to negotiate,” he said.
Trump is also expected on Tuesday to raise fentanyl-related tariffs on Chinese imports to 20% from 10% currently, Lutnick said.
Trump on Sunday lauded a decline in illegal border crossings last month in a post on Truth Social, saying they were “THE LOWEST EVER RECORDED. THANK YOU!!!”.
Mexico says ‘Plan B’ ready
Mexico has contingency plans ready in case Trump goes ahead with sweeping tariffs, his counterpart Claudia Sheinbaum said Monday on the eve of a deadline to avert duties.
“Whatever the decision, we have a plan,” she said at her morning news conference.
“There is constant communication in different areas, both security and trade, and we will wait to see what happens,” Sheinbaum added, underlining the need for patience.
“We have plan A, plan B, plan C, plan D,” she said, declining to give details.
Meanwhile, senior Canadian and Mexican officials on Friday met with Trump cabinet members to discuss their efforts to secure their borders, but Trump has cited insufficient progress in reducing fentanyl overdose deaths.
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White House trade adviser Peter Navarro told CNBC on Monday that he does not see Trump wavering on tariffs, but he did not mention specific levels or scope relative to Canada or Mexico.
He said the inflationary impact from any tariffs would be “second-order small, so I don’t see the president wavering on any of this, because he knows in order to get to a world in which America is strong and prosperous, with real wages going up and (more) factory jobs. This is the path that he’s chosen.”
Trump lays groundwork for tariffs
The White House late on Sunday issued technical orders from Trump that laid the groundwork for tariffs on Mexico and Canada by declaring that low-value packages from the two countries cannot enter the US duty-free under the “de minimis” exemption for packages under $800.
The ban will take effect once the Commerce Department determines that adequate screening measures take place, the order said.
Last week, senior Mexican officials held meetings in Washington with their US counterparts, pledging to take unspecified coordinated actions to tackle drug trafficking.
On Thursday, Mexico extradited some of its most notorious imprisoned drug lords to the United States, including a cartel kingpin wanted for decades over the murder of a US undercover agent.
Sheinbaum said that her government had made “the necessary agreements” with Washington and that the decision whether to apply tariffs “depends on the US government.”
US Treasury Secretary Scott Bessent said Friday that Mexico had proposed matching Washington’s tariff hikes on China to seal a deal.
“I do think one very interesting proposal that the Mexican government has made is perhaps matching the US on our China tariffs,” Bessent told Bloomberg Television in an interview.
If Canada did the same, Bessent said, “we could have Fortress North America” guarding against a flood of Chinese goods.
