Trump Warns Canada and Mexico Against Tariff Exemptions, Increases China Tariffs Ahead of Deadline

WASHINGTON, March 4 — US President Donald Trump ruled out any last-minute agreements to exempt Canada and Mexico from sweeping tariffs, while signing an order to increase duties on China.

Trump had initially announced—but later paused—broad tariffs on imports from Canada and Mexico in February, accusing both countries of failing to curb illegal immigration and drug trafficking. The temporary suspension is set to expire on Tuesday, and US stock markets tumbled after Trump stated there was “no room left” for the two nations to avoid new levies.

The White House also confirmed that Trump had signed an order raising the existing 10 percent tariff on Chinese imports to 20 percent.

The broad tariffs, particularly on Canada and Mexico, are expected to disrupt supply chains in key sectors such as automobiles and construction materials, potentially leading to higher consumer prices. This could complicate Trump’s efforts to keep household costs low, a key campaign promise.

On Monday, Trump told reporters that tariffs of up to 25 percent on Canadian and Mexican imports were “all set.” He added, “What they’ll have to do is build their car plants and other industries in the United States—then they have no tariffs.”

In response, Canadian Foreign Minister Mélanie Joly described the tariffs as an “existential threat” to the country, warning that thousands of jobs were at stake. She stated that if Trump proceeded with the levies, “we are ready with counter tariffs.”

Further Tariffs on Agriculture

Beyond this week’s deadline, Trump announced on social media that tariffs on agricultural imports would take effect on April 2. A White House official told AFP that these measures were part of Trump’s broader strategy of reciprocal tariffs tailored to individual trading partners.

Former US trade official Ryan Majerus noted that the administration sees these tariffs as leverage to address fentanyl and immigration concerns. “Washington is also attempting to rebalance trade relations,” he told AFP, adding that the use of emergency economic powers to impose tariffs on Canada, Mexico, and China is unprecedented. However, he cautioned that legal challenges could arise, saying, “It remains to be seen how this will all play out in potential lawsuits.”

Economic Impact and Rising Costs

Robert Dietz, chief economist at the National Association of Home Builders, warned that Trump’s tariffs on Canada could significantly impact the housing sector, predicting a combined tariff rate of over 50 percent on Canadian lumber.

“Softwood lumber futures prices have already increased by eight percent in the last few weeks,” Dietz said, adding that while the US plans to expand forestry production, short-term costs are expected to rise. Builders estimate that tariffs could add between $7,500 and $10,000 to the cost of a newly built single-family home.

Growing Trade Tensions

JPMorgan analysts cautioned that Tuesday’s tariffs would pose a “significant new headwind to economic activity” and lead to increased consumer costs.

Mexican President Claudia Sheinbaum said on Monday that Mexico has contingency plans in place, regardless of Trump’s final decision.

Trump has specifically targeted China over chemicals used to manufacture fentanyl, though many of these substances also have legitimate medical applications, complicating regulatory enforcement.

Canadian Prime Minister Justin Trudeau has pushed back against Trump’s claims, stating that less than one percent of fentanyl and undocumented migrants entering the US come through the Canadian border. However, he pledged a “strong, unequivocal, and proportional response” if the tariffs take effect.

Trudeau’s government has taken steps to address US concerns, including a Can$1.3-billion ($901-million) initiative to enhance border security and the appointment of a fentanyl czar to coordinate anti-drug efforts.

Meanwhile, in an apparent effort to prevent the tariffs, Mexico last week extradited several high-profile drug lords to the United States, including a cartel leader sought for decades over the killing of a US undercover agent.— AFP