President Trump Ensures Import Tariffs From Canada And Mexico As Large As 25 Percent Applicable From Today

Export-import illustration. (Wikimedia Commons/Captain Albert E. Theberge/NOAA Corps (ret.)

JAKARTA - President Donald Trump has confirmed a 25 percent tariff for imports of goods from Canada and Mexico effective from Tuesday

The announcement sparked a global stock sell and pushed bond yields lower, while Mexican pesos and Canadian dollars fell.

"They must be charged a fee. So what they have to do is build their car factory, frankly and other things in the United States, in this case they will not charge the tariff," President Trump said at the White House.

President Trump further said there was "no remaining space" for deals to avoid tariffs by curbing fentanyl flows to the United States.

President Trump also reiterated that he would increase tariffs on all Chinese imports to 20 percent from the previous tariff of 10 percent to punish Beijing for failing to stop fentanyl shipments to the United States.

President Trump said in an order China "has not taken adequate measures to ease the drug crisis."

The tariff is scheduled to take effect at 00:01 EST on Tuesday, the Trump administration confirmed in a Federal Register notice.

At the time, the US Customs and Border Protection Agency will start collecting 25 percent of Canadian and Mexican goods, with an import duty of 10 percent for Canadian energy. China's additional tariff will also apply to that time limit.

Meanwhile, CEOs and economists say the imposition of President Trump's rates on Canada and Mexico, which include annual US imports worth more than $900 billion, will provide a serious setback for North America's highly integrated economy.

Canada said it would retaliate with a 25 percent tariff on Canadian $ 155 billion worth of US goods if Trump's tariff comes into effect, Prime Minister Justin Trudeau said late Monday, urging the White House to reconsider.

PM Trudeau said Canadian rates will apply to Canadian$30 billion worth of products at the same time as the US rate on Tuesday, while the remaining US$125 billion worth of US goods will take effect in 21 days.

"Our rates will remain in effect until US trade actions are withdrawn, and if US rates are not stopped, we are in active and ongoing discussions with provinces and territories to pursue some non-tariff actions," PM Trudeau said in a statement.

Separately, Mexico's Ministry of Economy said there would be no public response until President Claudia Sheinbaum's routine press conference on Tuesday.

President Sheinbaum has promised to respond, saying: "We have a plan B, C, D."

Ontario Prime Minister Doug Ford told NBC the cost of Uncle Sam's country and Canada's retaliation would be a "big disaster" for both countries.

"I don't want to respond but we will respond in a way they haven't seen before," Ford said, adding the Michigan automaker is likely to close in a week and it will stop shipping nickel and cross-border electricity transmission from Ontario to the US.

"I'm going after everything," Ford said.

China's trading ministry on Tuesday pledged to take countermeasures against Washington's decision and urged the US to "immediately withdraw" its rates, which it describes as "non-reasonable and baseless, detrimental to other parties."

The government newspaper Global Times said Beijing's countermeasures would most likely target US agricultural and food products.

Domestically, Democratic Party lawmaker from Washington State Suzan DelBene said the decision to resume tariffs on Canada and Mexico would cost US families thousands of dollars in grocery stores, gas stations, and pharmacies counters.

"No president can raise taxes without votes in Congress," he said in a statement.

However, White House trading adviser Peter Navarro said on Monday the impact of inflation from any tariff would be "very small" and he did not expect the president to falter on those measures.

"This is the path it has chosen," Navarro told CNBC.