President Donald Trump has chosen to proceed with the tariffs he threatened on Canada and Mexico, though the final rate will be his decision. U.S. Commerce Secretary Howard Lutnick stated in an interview on Sunday that the tariffs on the country’s largest trading partners would take effect as scheduled on Tuesday. However, he noted that Trump would decide whether to maintain the initial 25 percent rate or make adjustments.
“We’re going to leave it up to the president and his team to negotiate,” Lutnick told the Fox News program “Sunday Morning Futures.” He also warned that a tariff increase on China from 10% to 20% is still set to go into effect Tuesday, as is expected. “That’s unless the Chinese make major changes to stop fentanyl, heroin, and other drugs coming in,” he said.
But while the administration says its motive is to push Canada and Mexico into cooperating with the US on immigration, migrant caravans, and the smuggling of chemicals used for fentanyl, the move is likely to trigger retaliation by both countries that will drive prices higher for American consumers on everything from cars to fresh produce to home building materials. And it’s an about-face from the trade agreement that Trump helped to renegotiate with Canada and Mexico during his first term, which he called the ”fairest, most balanced and beneficial trade agreement we have ever signed.”
In a series of social media posts over the weekend, Trump complained that Mexico and Canada were not doing enough to address his concerns about migrants and drugs. He also repeated his threat to impose tariffs on China next week, and the value of the peso and the Canadian dollar fell after that warning.
On Thursday, White House economic adviser Kevin Hassett said that the president’s plan to impose tariffs on all imports from China and Canada- and not just those he has targeted for more than a month- remains on track. He added that a new study on tariffs is due to be finished by April 1, and that will be the deadline for Trump to decide on his next steps. The plan aimed to force China and other trading partners to address complaints about unfair trade policies and reduce the US trade deficit with them. However, the US-China relationship has been in flux since Trump’s election victory, when he promised to impose steep tariffs on Chinese goods. That has led some analysts to warn that stiff tariffs could stoke inflation on many consumer goods and slow economic growth. CNN’s Vjosa Isai and Paulina Villegas contributed to this report.
