Clock Ticks Down Toward Sweeping Tariffs on Canada, Mexico and China

President Trump could still choose to pause the tariffs he is threatening to put on America’s largest trading partners Tuesday, but industries are preparing for the worst.

· Mr. Trump had threatened to impose them on the three countries beginning Feb. 4 but decided to pause the levies on Canada and Mexico for one month.

· He is now threatening another 10 percent on all Chinese imports, which would come on top of the 10 to 25 percent tariffs he imposed on many Chinese products in his first term.

· Mr. Lutnick implied that at least some levies would go forward, though he intimated they could be lower than the 25 percent Mr. Trump has promised.

· Chinese officials have not rushed to Washington with new concessions. People familiar with the discussions say that Beijing is still probing what Mr. Trump wants more broadly from the relationship.

· Canada, Mexico and China account for more than 40 percent of U.S. imports.

· For Canada and Mexico, most trade with the United States has faced zero tariff rates since the 1980s, he said, with free trade agreements for automobiles even dating back to the 1960s.

· Of all the industries that depend on North American trade, automotive manufacturing could see the biggest impact. Canada and Mexico account for nearly half of U.S. car imports and exports, and an even greater share of the trade in motor vehicle bodies and parts.

· Competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American work force,” said Matt Blunt, the president of the American Automotive Policy Council, which represents General Motors, Ford Motor and Stellantis.

· It typically takes four years or more to design a new car and outfit a factory to produce it.

· There may be only one or two suppliers for certain precision components, he said, and none producing in the United States. “It’s not practical to just buy from an American supplier because there isn’t one.

· U.S. companies that source energy from around North America had a reprieve last month when Mr. Trump lowered the planned tariff on energy imported from Canada to 10 percent, from 25 percent.

· Canadian oil producers and U.S. refiners will share the additional cost burden. Prices at the pump also could rise modestly.

· Prices for products like the steel pipe that companies use to line their wells are already climbing in anticipation of the tariff.

[ABS News Service/03.03.2025]

When President Trump announced last week that an additional 10 percent tariff on Chinese goods would take effect on Tuesday (04.03.2025), Logan Vanghele immediately called the logistics company that was handling a $120,000 shipment of aquarium products for his small business.

The cargo was on a ship en route to Boston from China. His message was clear: “Get this thing off the boat, please.”

Company executives and foreign officials are scrambling to avert the consequences of another tight deadline from Mr. Trump, who has threatened to put stiff tariffs on goods coming in from China, Canada and Mexico starting just after midnight Tuesday.

The president describes this as an effort to pressure those countries to stop the flow of deadly drugs and migrants to the United States. But Mr. Trump’s game of brinkmanship with America’s three largest trading partners is creating intense uncertainty for business owners.

That includes Mr. Vanghele, 28, who runs a small company that sells lighting and equipment for aquariums, all of which is made in China. He had no idea that the shipment — one of his biggest so far — could face such fees when it left Yantian Port in southeastern China in January, just days before Mr. Trump’s inauguration. In a frantic effort to avoid paying roughly $25,000 in tariffs, Mr. Vanghele pleaded with the logistics firm last week to unload his container at a port in Norfolk, Va., where it stopped on Friday, instead of traveling on to Boston.

While it is possible that Mr. Trump’s new tariffs will include an exemption for goods that are already on the water, there is no guarantee.

“Even if I’ve got to pay an absurdly high amount for it to get trucked over, it’s not going to come close to what the tariffs are,” Mr. Vanghele said. “I’m basically in Hail Mary mode.”

The tariffs — which would add a 25 percent fee on all Mexican and Canadian exports coming across those borders and an additional 10 percent for Chinese goods — could still be pushed off.

Mr. Trump had threatened to impose them on the three countries beginning Feb. 4 but decided to pause the levies on Canada and Mexico for one month after the countries promised measures like Mexico’s sending more troops to the border and Canada’s appointing a “fentanyl czar.”

Mr. Trump did move forward with imposing a 10 percent tariff on all products from China, which triggered retaliation from that country. He is now threatening another 10 percent on all Chinese imports, which would come on top of the 10 to 25 percent tariffs he imposed on many Chinese products in his first term.

Howard Lutnick, the commerce secretary, said in an interview on Fox News on Sunday that Canada and Mexico had “done a lot” to meet the president’s demands and that the situation was “fluid.” Still, Mr. Lutnick implied that at least some levies would go forward, though he intimated they could be lower than the 25 percent Mr. Trump has promised.

“There are going to be tariffs on Tuesday on Mexico and Canada,” he said. “Exactly what they are, we’re going to leave that for the president and his team to negotiate.”

Canada and Mexico are both deeply dependent on exports to the United States, and Mr. Trump’s threats have whipped their governments into action. Delegations of officials have made trips to Washington in recent weeks, including to meet with Mr. Lutnick.

In contrast, Chinese officials have not rushed to Washington with new concessions. People familiar with the discussions say that Beijing is still probing what Mr. Trump wants more broadly from the relationship.

The prospect of new tariffs — in addition to a variety of other proposed levies on steel, aluminum, copper, timber and other products — have elicited anxiety and frustration from businesses selling everything from automobiles to breast pumps, who say tariffs will raise their costs as they move goods across borders.

Canada, Mexico and China account for more than 40 percent of U.S. imports. The tariffs that Mr. Trump threatened would dwarf any of the trade measures he has previously taken, raising the average U.S. tariff rates “to levels not seen since the 1940s,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.

For Canada and Mexico, most trade with the United States has faced zero tariff rates since the 1980s, he said, with free trade agreements for automobiles even dating back to the 1960s.

“Increasing tariffs from zero to 25 percent overnight is likely to be much more disruptive to those now highly integrated North American supply chains than anything President Trump did in his first term,” Mr. Bown said.

Of all the industries that depend on North American trade, automotive manufacturing could see the biggest impact. Canada and Mexico account for nearly half of U.S. car imports and exports, and an even greater share of the trade in motor vehicle bodies and parts.

Automakers have argued that parts and vehicles that are exempt under the current free trade treaty should continue to cross borders duty free.

“Our American automakers, who invested billions in the U.S. to meet these requirements, should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American work force,” said Matt Blunt, the president of the American Automotive Policy Council, which represents General Motors, Ford Motor and Stellantis.

Automakers have petitioned the White House arguing for such an exemption, but people familiar with the deliberations say the president has not seemed amenable to the idea.

Even if tariffs are ultimately not imposed, their threat makes it difficult for automakers to plan, analysts say. It typically takes four years or more to design a new car and outfit a factory to produce it.

There may be only one or two suppliers for certain precision components, he said, and none producing in the United States. “It’s not practical to just buy from an American supplier because there isn’t one,” Mr. Helveston said.

U.S. companies that source energy from around North America had a reprieve last month when Mr. Trump lowered the planned tariff on energy imported from Canada to 10 percent, from 25 percent. But the levy will be disruptive nevertheless, particularly for companies that transform oil into fuels like gasoline and diesel. That’s because U.S. refineries were built to run on a mix of the darker, heavier oil found in Canada — and the lighter crude produced domestically.

Refineries in the Midwest are particularly dependent on Canadian oil and, if the tariff takes effect, will have to choose between paying more for oil and cutting production. Analysts generally expect Canadian oil producers and U.S. refiners will share the additional cost burden. Prices at the pump also could rise modestly.

Oil and gas companies are also beginning to feel the effects of the 25 percent tariff on imported steel that Mr. Trump announced last month, even though it will not go into effect until March 12. Prices for products like the steel pipe that companies use to line their wells are already climbing in anticipation of the tariff.