(Reuters) – U.S. President Donald Trump is expected to decide on Monday what levels of tariffs he will impose early on Tuesday on Canada and Mexico amid last-minute negotiations over border security and efforts to halt the inflow of fentanyl opioids.
Trump has vowed to impose 25% tariffs on all imports from Canada and Mexico, with 10% for Canadian energy. CEOs and economists say the action, covering more than $900 billion worth of annual U.S. imports from its southern and northern neighbors would deal a serious setback to the highly integrated North American economy.
The tariffs are scheduled to take effect at 12:01 a.m. EST (0501 GMT) on Tuesday.
Commerce Secretary Howard Lutnick on Sunday signaled that Trump may not impose the full amount of tariffs, saying that the president would determine their exact levels.
Mexico and Canada have “done a reasonable job” securing their U.S. borders and Trump is considering what the final tariff levels should be, 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 Tuesday on Mexico and Canada. Exactly what they are, we’re going to leave that for the president and his team to negotiate,” he said.
Trump is also expected on Tuesday to raise fentanyl-related tariffs on Chinese imports to 20% from 10% currently, unless Beijing ends fentanyl trafficking into the U.S., Lutnick said.
Trump on Sunday lauded a decline in illegal border crossings last month in a post on Truth Social, saying they were “THE LOWEST EVER RECORDED. THANK YOU!!!”.
Senior Canadian and Mexican officials on Friday met with Trump cabinet members to discuss their efforts to secure their borders, but Trump has cited insufficient progress in reducing fentanyl overdose deaths.
According to the Centers for Disease Control and Prevention, 72,776 people died from synthetic opioids in 2023 in the U.S., chiefly from fentanyl.
NAVARRO: TRUMP UNWAVERING
White House trade adviser Peter Navarro told CNBC on Monday that he does not see 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 Sunday issued technical orders from Trump that lay the groundwork for tariffs on Mexico and Canada by declaring that low-value packages from the two countries cannot enter the U.S. duty-free under the “de minimis” exemption for packages under $800. The ban will take effect once the Commerce Department determines that adequate screening measures take place, the order said.
Trump on February 4 suspended the de minimis exclusion for low-value Chinese packages, but the U.S. Customs and Border Protection Agency had to pause the suspension because packages were piling up at U.S. 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 U.S., and officials say the packages often enter unscreened.
Reporting by David Lawder and Andrea Shalal; additional reporting by Susan Heavey; Editing by Alistair Bell
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