United States President Donald Trump said on Monday that there is no chance of Mexico or Canada preventing 25% rates from taking effect on Tuesday, shaking financial markets with the prospect of new economic barriers in North America.
“They will have to have a fare. Therefore, what they need to do is build their car factories, frankly, and other things in the United States, and in this case they will have no tariffs, ”Trump said in the White House. He said “there was no more space” for an agreement that would avoid tariffs by reducing fentanyl flow to the United States.
Trump also said that reciprocal import tariffs would come into force on April 2 in countries that impose rates on US products.
US stock rates expanded their losses after Trump’s comments. Dow Jones Industrial Averaga fell 1.58% on the day, S&P 500 fell 1.78% and NASDAQ composite retreated 2.47%.
CEOs and economists claim that the action, which covers more than $ 900 billion in US annual imports from its southern and north neighbors, would represent a serious setback for the highly integrated US economy.
Tariffs are scheduled to take effect at 12:01 pm (2:01 am in Brasília) on Tuesday, when Canada and Mexico will suffer 25% tariffs, 10% for Canadian energy. Mexican authorities did not respond immediately to requests for comments.
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Canada Foreign Minister Melanie Joly told reporters that Ottawa would be ready to respond. “There is a level of unpredictability and chaos that leaves the oval hall, and we will be dealing with it,” she said.
In an interview with CNN, US Secretary of Commerce, Howard Lutnick, said the two countries have progressed in border safety, but needed to do more to contain Fentanil flow for the US to reduce opioid’s deaths.
On Tuesday, Trump is also expected to increase rates on Chinese imports from 10% to 20% unless Beijing ended the US fentanyl trafficking. Lutnick did not mention any possible change in these rates, which would affect about $ 439 billion in annual imports.
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Mexico Response Plans
Mexico, after avoiding Trump’s first round of tariffs by closing a last -minute deal to send thousands of troops to his northern border, intensified anti -drug efforts and suggested new measures on imported Chinese products.
President Claudia Sheinbaum, at a press conference on Monday, before Trump made her comments, said her government was calm while waiting for Trump’s decision, but Mexico will answer if the tariffs are imposed.
“We have a plan B, C and D,” said Sheinbaum, without giving details. She added that the US coordination about trade and fentanyl trafficking has been “very good.”
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According to disease control and prevention centers, 72,776 people died of synthetic opioids in 2023 in the US, mainly from fentanil.
Navarro: UNABLE TRUMP
White House commercial advisor Peter Navarro told CNBC on Monday that the inflationary impact of any tariffs would be “small, second order, so I don’t see the president hesitating any of this.”
On Saturday, Trump added another commercial action to a waterfall of tariff ads last month, opening a national safety investigation on sawed wood imports and wooden products that could result in high tariffs. Canada, which is already facing 14.5% US fees on the sawn coniferous wood, would be particularly reached.
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The previous week, Trump ordered the resumption of a tariff investigation on countries that charge taxes on digital services, proposed fees of up to $ 1.5 million every time a ship built in China entered a US port and launched a new tariff investigation on copper imports.
This adds to its plans to determine higher “reciprocal tariffs” in the US to match the varying rates of other countries and compensate for its other commercial barriers, a measure that could harshly affect the European Union compared to tax added taxes charged by EU countries.
But Trump’s “steroid rates” can maintain higher inflation and bring the global economy to recession, warned Desmond Lachman, senior member of the conservative American Enterprise Institute.
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Package Requests
The White House issued Trump technical orders related to Mexico and Canada Trump technical orders, stating that low -value packages of both countries cannot enter the US with tax exemption under exemption for shipments below $ 800. The prohibition will come into force as soon as the Trade Department determines the adoption of appropriate screening measures, according to the Order.
On February 4, Trump suspended exclusion for low-value Chinese packages, but the US border customs agency had to pause the suspension because the packages were accumulating at US airports without a way to examine them.
Fentanil traffickers have explored package exemption to send Fentanil and their chemical precursors to the US, and authorities say the packages usually enter without screening.
