WASHINGTON: Time is running short for Canada, Mexico and China to avert sweeping tariffs announced by US President Donald Trump, with the planned levies to take effect on Tuesday over what he deems an “unacceptable” flow of drugs.
Trump unveiled — then paused — blanket tariffs on imports from his country’s major trading partners Canada and Mexico in February, accusing them of failing to stop illegal immigration and drug trafficking. The halt is due to expire on Tuesday.
But sweeping levies of up to 25 percent will likely snarl supply chains for key sectors like automobiles and construction materials, risking a hike in consumer prices. This could complicate Trump’s efforts to fulfil his campaign promises of lowering the cost of living for households.
Trump has also threatened a further 10-pc tariff on Chinese goods, piling on an additional 10-pc rate that has already taken effect. “There’s no doubt that the administration is trying to solve the long-standing fentanyl and immigration challenges, and these tariffs have given the administration leverage as we’ve seen with the response so far by Canada and Mexico,” said Ryan Majerus, a former US trade official.
Washington is also trying to rebalance trade ties and improve conditions for US companies, he said. But the use of emergency economic powers to impose tariffs is novel, “and it remains to be seen how this will all play out in potential lawsuits,” warned Majerus, a partner in international trade at law firm King & Spalding.
JPMorgan analysts warned on Friday that Tuesday’s tariffs would “create a significant new headwind to economic activity” and boost consumer costs. They added that the planned levies on all three countries would lift the US effective tariff rate to nine percent — from 1.4pc in 2017.
Up to Trump
Mexico’s president Claudia Sheinbaum said on Monday that her country has contingency plans ready, whatever the decision Trump takes. “There is constant communication in different areas, both security and trade, and we will wait to see what happens,” Sheinbaum added.
Over the weekend, US Commerce Secretary Howard Lutnick told Fox News that even as Mexico and Canada have reasonably addressed Washington’s border concerns, they would still face tariffs.
He took aim at illicit fentanyl entering the United States, saying its ingredients came from China. But Lutnick left the door open to potential changes in Trump’s tariff plans: “Exactly what they are, we’re going to leave that for the president and his team to negotiate.” Lutnick added that duties on China were likely set unless Beijing stopped making ingredients for fentanyl.
While Washington has targeted China over chemicals for the drug, many of these components have legitimate medical uses too — making prosecution tricky. Canadian Prime Minister Justin Trudeau has stressed that less than one percent of the fentanyl and undocumented migrants that enter the United States come through the Canadian border.
He said on Sunday that Ottawa would keep working to ensure there are no fresh levies this week. But he added that Canada would “have a strong, unequivocal and proportional response” if levies took effect.
Trudeau’s government has taken a series of steps to address Trump’s concerns including a Can$1.3-billion ($901-million) plan to enhance border security.
Published in Dawn, March 4th, 2025
