Trump to decide US tariff levels on Mexico, Canada as March 4 deadline approaches

WASHINGTON – US President Donald Trump is expected to decide on March 3 what levels of tariffs he will impose early on March 4 on Canada and Mexico amid last-minute negotiations over border security and efforts to halt the inflow of fentanyl opioids.

Mr Trump has

vowed to impose 25 per cent tariffs on all imports from Canada and Mexico

, with 10 per cent for Canadian energy. CEOs and economists say the action, covering more than US$900 billion (S$1.2 trillion) worth of annual US imports from its southern and northern neighbours, would deal a serious setback to the highly integrated North American economy.

The tariffs are scheduled to take effect at 12.01am Eastern Standard Time on March 4.

Commerce Secretary Howard Lutnick on March 2 signalled that Mr Trump may not impose the full amount of tariffs, saying that the President would determine the exact levels.

Mexico and Canada have “done a reasonable job” securing their US borders, and Mr Trump is considering what the final tariff levels should be, Mr Lutnick told Fox News.

“He’s sort of thinking about right now how exactly he wants to play with Mexico and Canada, and that is a fluid situation. There are going to be tariffs on March 4 on Mexico and Canada. Exactly what they are, we’re going to leave that for the President and his team to negotiate,” he said.

Mr Trump is also expected on March 4 to raise fentanyl-related tariffs on Chinese imports to 20 per cent from 10 per cent currently, unless Beijing ends fentanyl trafficking into the US, Mr Lutnick said.

Mr Trump on March 2 lauded a decline in illegal border crossings the previous month in a post on Truth Social, saying they were “the lowest ever recorded. Thank you!!!”.

Senior Canadian and Mexican officials on Feb 28 met Trump Cabinet members to discuss their efforts to secure their borders, but Mr Trump has cited insufficient progress in reducing fentanyl overdose deaths.

According to the Centres for Disease Control and Prevention, 72,776 people died from synthetic opioids in 2023 in the US, chiefly from fentanyl.

Navarro: Trump unwavering

White House trade adviser Peter Navarro told CNBC on March 3 that he does not see Mr Trump wavering on tariffs, but he did not mention specific levels or scope relative to Canada or Mexico.

He said the inflationary impact from any tariffs would be “second-order small, so I don’t see the President wavering on any of this, because he knows in order to get to a world in which America is strong and prosperous, with real wages going up and (more) factory jobs, this is the path that he’s chosen”.

The White House late on March 2 issued technical orders from Mr Trump that lay the groundwork for tariffs on Mexico and Canada by declaring that low-value packages from the two countries cannot enter the US duty-free under the “de minimis” exemption for packages under US$800. The ban will take effect once the Commerce Department determines that adequate screening measures take place, the order said.

Mr Trump on Feb 4 suspended the

de minimis exclusion for low-value Chinese packages

, but the US Customs and Border Protection agency had to pause the suspension because packages were piling up at US airports without a way to screen them.

Fentanyl traffickers have exploited the de minimis package exemption to ship fentanyl and its precursor chemicals into the US, and officials say the packages often enter unscreened. REUTERS