Whether the 25% tariffs for Mexico and Canada set to take effect this Tuesday (March 4) go ahead as planned, is a “fluid situation,” US Commerce Secretary Howard Lutnick said on Fox News on Sunday (March 2).
Lutnick said the US neighbours “have done a lot” regarding the border, so US President Donald Trump is “thinking about […] how exactly he wants to play it with Mexico and Canada and that is a fluid situation.” He said the countries had not done enough to tackle illicit drug flows into the US, contributing to the fentanyl crisis.
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He affirmed there would be incoming tariffs on Tuesday but “exactly what they are, we’re going to leave that for the president and his team to negotiate.”
Lutnick also touched on incoming tariffs for China. Last week, Trump said he would double the 10% tariffs on Chinese imports that came into effect in early February and that this new rate would take effect this Tuesday (March 4). Lutnick highlighted these tariffs would go through unless China ends the production of fentanyl ingredients.
What has changed?
While Trump’s tariff threats have been wide-ranging, it is worth noting there is only one tariff that has gone into effect so far. A 10% universal tariff on Chinese imports went into effect on February 4. Analysts called it a light start, given that throughout his presidential campaign Trump said the tariff would be at 60%.
Even with the light 10% tariff, a lack of implementation infrastructure for some aspects of the regulation caused chaos for logistics operators. A longstanding duty exemption for shipments worth less than $800 that was scraped as part of the tariff plan was soon reinstated after confusion caused the US Postal Service to temporarily stop accepting parcels from Hong Kong and China.
China then imposed retaliatory tariffs on the US, which took effect February 10. These were a 15% tariff on US coal and liquified natural gas (LNG) products and a 10% tariff on crude oil, agricultural machinery and large engine cars.
March deadlines and Ukraine-Russia
On March 4, the 25% tariffs on all imports from Canada and Mexico (which were initially delayed for a month) are meant to take effect. Trump also said he would double the initial 10% universal tariff on Chinese products, alleging that illicit drug flows into the US are still occurring at “unacceptable levels.”
On March 12, a 25% tariff on steel and aluminum is meant to take effect with no exemptions. The largest importers of those metals to the US are Canada, Brazil and Mexico. During Trump’s first term, he imposed some tariffs on steel and aluminum but negotiated exemptions for major exporters like Australia, Canada and Mexico.
The administration’s focus, however, has been diverted after Trump, US Vice President JD Vance and Ukrainian President Volodymyr Zelenskyy clashed at an explosive press conference on Saturday. The almost hour-long ordeal shook the world, with many describing it as the death of diplomacy.
This diversion could present an opportunity for Canada and Mexico to scrape a last-minute deal (as they did last time) and for countries to argue for exemptions from the steel and aluminium tariffs (as Australia has been trying to do.)
