US tariffs against Canada and Mexico are set to come into effect on Tuesday but their level will be decided by Donald Trump, the US commerce secretary has said.
The US president has threatened to impose 25% tariffs, which are a tax on imports, on his two neighbours on 4 March, in response to what he says is an unacceptable flow of illegal drugs and migrants into the US.
Commerce Secretary Howard Lutnick said on Sunday the tariffs will happen as planned but the exact details will depend on negotiations.
A 10% tariff on Chinese imports is also expected to be implemented in response to US accusations that Beijing is not doing enough to stop the flow of fentanyl into the US.
This means that if brought into effect, Chinese exports to the US will face a levy of at least 20%, following a 10% tariff that took effect a month ago.
Chinese state media claims leaders in Beijing have prepared a series of countermeasures to happen on the same day, raising the prospect of an all-out trade war between the world’s top two economies.
China’s state-run Global Times newspaper said the countermeasures will probably target US agricultural and food products.
Analysts believe Beijing still hopes to avoid an all-out trade war and negotiate a truce with the Trump administration, but so far there has been no sign of a deal between the two economic giants.
Trump has long maintained that tariffs are a useful tool to correct trade imbalances and protect US manufacturing.
Speaking on Sunday Morning Futures on Fox News, Commerce Secretary Lutnick said: “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.”
Canada has repeatedly said tariffs will harm both economies but added that it will defend itself if they happen.
Canadian Internal Trade Minister Anita Anand met officials in Washington in recent days and said over the weekend there will be a response.
“We are steady at the wheel. We are prepared for any eventuality, but we will at every turn defend our country’s economy,” she told CBC News.
Last month, Canada had prepared a list of $30bn (£23.6bn) worth of American goods it said it would levy in response to US tariffs. Items on that list included everyday goods like pasta, clothing and perfume.
The Canada Border Services Agency (CBSA) says it has been “surging” its efforts to tackle fentanyl crossing into the US.
Only 1% of fentanyl seized in the US is thought to come from Canada, according to US data.
Canadian Prime Minister Justin Trudeau said on Sunday, from a Ukraine summit in London, that Canada is “not an issue” as a source of illegal fentanyl in the US.
Mexico’s president, Claudia Sheinbaum, appeared to send a message to Trump after the Lutnick interview when she said at a public event in the city of Colima that “Mexico has to be respected”.
“Co-operation [and] co-ordination, yes, subordination, never.”
President Trump has also announced a 25% charge on all steel and aluminium imports, which is meant to come into effect on 12 March.
In addition, he has threatened to impose custom “reciprocal” tariffs on individual countries, as well as 25% tariffs on the European Union.