After a brief delay to allow both Canada and Mexico time to respond to US border concerns, President Donald Trump announced on Monday that the tariffs against Canada and Mexico will proceed as scheduled next month.
Trump stated during a press conference held with French President Emmanuel Macron that “the tariffs will be implemented on time and on schedule”.
Canada and Mexico have implemented border security measures that will delay the tariffs from taking effect on March 4.
Trump has presented the tariffs to be a way of curbing undocumented immigration and drug trafficking.
Trump reiterated also his plan of reciprocal tariffs. This would allow the US to match its tariffs and trade barriers on imported goods with those imposed by foreign nations.
He said, “Our country will become extremely liquid again and wealthy.”
White House officials have identified Canada, Mexico and China as the major suppliers of fentanyl to the US. These shipments are often delivered in low-value, small packages, which can be easily overlooked.
The sheer number of packages that arrive at US airports each day has made it difficult to try and close the de minimis loophole. This allows for duty-free shipping under $800.
Trump’s Executive Order on Fentanyl instructed Homeland Security Secretary Kristi Nuem to regularly update Congress and the White House on this issue.
Trump tariffs
Trump introduced new tariffs after imposing an initial 10% duty on Chinese goods and threatening a 25% tariff. This could complicate negotiations at the border.
The following are planned increases
- The steel and aluminium tariffs will be a flat rate of 25% on March 12. This will revoke the longstanding exemptions that Canada and Mexico have enjoyed.
- The tariff increases extend to hundreds downstream products.
- Imports of pharmaceuticals, semiconductors and automobiles will be subject to a 25% import tariff.
- The US Trade Policy and Foreign Tariff Rates will be aligned with the Orders of Reciprocal Tariffs.
The USMCA, which has to be reviewed by 2026, could see a faster renegotiation if these measures are taken.
Trump has expressed increasing dissatisfaction over automobile imports coming from Canada and Mexico. He renegotiated NAFTA in 2020 into USMCA.
Mexico and Canada’s border efforts
Mexico and Canada both have introduced measures to counter Trump’s tariff threat:
- Mexico has sent 10,000 National Guard troops to patrol its border with Canada. Claudia Sheinbaum, President of Mexico has also called on the US government to act against gun-smuggling in Mexico.
- Kevin Brosseau was appointed by Canada as the fentanyl Czar, to coordinate efforts against smuggling. Ottawa has also classified drug cartels terrorist groups and enhanced border surveillance using drones and helicopters.
- Canada increased border security expenditures by C$1.3billion (913m$) in December.
Justin Trudeau, the Canadian prime minister, has been in constant contact with Trump. They spoke on Saturday about border security as well as fentanyl.
Trudeau, who has threatened to implement retaliatory duties on C$155billion ($107billion) worth of US products, such as beer, wine and scotch, has stressed that Canada will avoid the tariffs if it addresses US concerns.
The Mexican Economy Minister Marcelo Ebrard described last week a “constructive dialog” with US officials including Commerce Secretary Howard Lutnick and White House Economic Advisor Kevin Hassett.
The post Trump announces that tariffs against Canada and Mexico are to proceed could be updated as new information unfolds.
