Canada and Mexico are expected to intensify efforts this week to avoid punishing 25% tariffs on their exports to the U.S. in talks to persuade President Donald Trump’s administration that their steps to increase border security and curb fentanyl trafficking are working ahead of a March 4 deadline.
Canada and Mexico have both taken steps to beef up border security, which bought them about a month’s reprieve from the tariffs that could wreak havoc on a highly integrated North American economy.
The negotiations this week, along with new reports from the Department of Homeland Security, will help determine whether the Trump administration extends the tariff suspension for longer, said Dan Ujczo, a lawyer specializing in U.S.-Canada trade matters.
Even if that happens, he said, Trump will likely maintain the tariff threat at least until there’s clear evidence the border measures are halting migrant and fentanyl flows.
“There’s progress being made on the security front,” said Ujczo, senior counsel with Thompson Hine in Columbus, Ohio. “But it’s overly optimistic to think that those tariffs would be fully rescinded.”
The White House, U.S. Trade Representative’s office and Commerce Department did not respond to requests for comment on the negotiations expected this week ahead of the March 4 deadline to implement the tariffs, which would apply to over $918 billion worth of U.S. imports from the two countries, from autos to energy.
MORE TARIFF THREATS
Since Trump’s initial 25% tariff threat and imposition of a 10% duty on all Chinese imports, he has heaped on more tariff actions that could muddy the waters on border negotiations.
These include substantially raising tariffs on steel and aluminum to a flat 25%, rescinding longstanding exemptions for Canada and Mexico, the largest sources of U.S. imports of the metals. These steep increases, which also extend to hundreds of downstream steel products, are due to take effect a week after the border tariffs, on March 12.
Trump has also said he wants to impose 25% tariffs on imports of autos, pharmaceuticals and semiconductors, in addition to ordering “reciprocal” tariffs to match the duty rates and trade barriers of other countries.
The threat of these tariffs could kick off an early launch of a renegotiation of the U.S.-Mexico-Canada agreement on trade that is due by 2026, Ujczo added.
Trump signed the USMCA into law in 2020 after renegotiating the 1994 North American Free Trade Agreement, but has increasingly expressed dissatisfaction with imports of autos from Mexico and Canada.
TYT Newsroom
