The president added that reciprocal tariffs would go into effect on April 2 for countries that impose tariffs on U.S. products.
U.S. President Donald Trump said on Monday there was no chance Mexico or Canada would block the 25% tariffs that take effect on Tuesday, sending financial markets reeling at the prospect of new economic barriers in North America.
"They're going to have to have a tariff. So what they have to do is build their auto plants, frankly, and other things in the United States, in which case there would be no tariffs," Trump said at the White House. He said there was "no room left" for a deal to avoid tariffs by stopping fentanyl flows into the United States.
Trump added that reciprocal tariffs would go into effect on April 2 for countries that impose tariffs on U.S. products.
Business leaders and economists say the move, which affects more than $900 billion worth of U.S. imports from its northern and southern neighbors each year, would be a serious setback for the highly integrated U.S. economy.
The tariffs are scheduled to take effect Tuesday at 0501 GMT. At that time, Canada and Mexico would face tariffs of 25%, with 10% on Canadian energy. Mexican officials did not immediately respond to requests for comment.
Canadian Foreign Minister Melanie Joly told reporters Ottawa would be ready to respond. "There is a level of unpredictability and chaos that comes out of the Oval Office, and we're going to deal with that," she said.
US Commerce Secretary Howard Lutnick told CNN that both countries have made progress on border security but need to do more to stem the flow of fentanyl into the United States to reduce opioid deaths.
Trump is also expected to raise fentanyl-related tariffs on Chinese imports to 20% from 10% currently on Tuesday unless Beijing stops trafficking fentanyl to the United States, Lutnick said, without mentioning any changes to the tariffs, which would affect about $439 billion worth of imports annually.
MEXICO'S RESPONSE PLANS
After avoiding Trump's first round of tariffs by striking a last-minute deal to send thousands of troops to its northern border, Mexico has stepped up anti-drug efforts and hinted at new measures on imported Chinese goods.
President Claudia Sheinbaum said at her daily press conference on Monday, before Trump made the announcements, that her government was calmly awaiting the decision, but that Mexico would respond if tariffs were imposed.
"We're going to wait and see what happens. We need to be calm, calm and patient in this matter, and we have Plan A, Plan B and Plan C," he said, without giving further details. He added that coordination with the United States on the trade and trafficking of fentanyl has been "very good."
According to the Centers for Disease Control and Prevention, 72,776 people will have died from synthetic opioids in the United States in 2023, mostly from fentanyl.
White House trade adviser Peter Navarro told CNBC on Monday that the inflationary impact of any tariffs would be "small, second-order."
"I don't see the president wavering on any of this, because he knows that to get to a world where America is strong and prosperous with real wages rising and... jobs, this is the path he has chosen."
On Saturday, Trump added another trade measure to a cascade of tariff announcements over the past month, opening a national security investigation into imports of lumber and wood products that could result in steep tariffs.
The White House released technical orders from Trump late Sunday regarding tariffs on Mexico and Canada, declaring that low-value packages from both countries would not be allowed to enter the United States duty-free under the "de minimis" exemption for shipments under $800.
The ban will go into effect once the Department of Commerce determines that adequate control measures are in place, according to the order.
Trump suspended the de minimis exclusion for low-value Chinese packages on Feb. 4, but Customs and Border Protection had to pause the suspension because the packages were piling up at U.S. airports with no way to screen them.
Fentanyl traffickers have taken advantage of the de minimis package exemption to ship fentanyl and its precursor chemicals into the United States, and authorities say the packages often enter unchecked.
