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.
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.
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.
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.
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.
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.
Mexican Economy Minister Marcelo Ebrard said on Thursday that he had a “constructive dialogue” during a meeting with Trump’s top trade officials, including Commerce Secretary Howard Lutnick, White House economic adviser Kevin Hassett and U.S. Trade Representative nominee Jamieson Greer.
Mexico has begun deploying as many as 10,000 national guard troops to its northern border, as part of the agreement that Mexican President Claudia Sheinbaum said also called on the U.S. to work to stop the flow of firearms into Mexico.
Ottawa also has reclassified drug cartels as terrorist entities and has deployed drones, helicopters and other surveillance technologies on the vast northern U.S. border.
SMALL PACKAGE HURDLE
A major hurdle to slowing these shipments is a pause in Trump’s abrupt order to suspend the duty-free “de minimis” exemption for packages valued at under $800 from the three countries because no procedures were in place to screen the millions of low-value express packages arriving at U.S. airports daily.
It’s unclear when the U.S. Customs and Border Protection agency will be able to close the de minimis loophole again. Trump’s initial fentanyl and border tariff order directed Homeland Security Secretary Kristi Noem to report regularly on the crisis to Trump and Congress.
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