The U.S. will move forward with tariffs on Canada and Mexico next week, while an additional 10% import tax on China is also set to take effect. Meanwhile, plans for 25% duties on the European Union remain under consideration.
The Biden administration confirmed that tariffs on Canada and Mexico, which had been on hold for nearly a month, will now take effect on March 4. The announcement came from a Truth Social post by President Donald Trump on Thursday. The president also confirmed that the U.S. will impose an additional 10% tariff on Chinese imports the same day.
These developments come amid broader trade measures, including Trump’s plan to levy 25% tariffs on vehicles and other goods from the European Union. The president reiterated Wednesday that his reciprocal tariff policy is set to go live on April 2, signaling a more aggressive stance on trade.
Tariffs Tied to Drug Control Efforts
Trump originally set the 25% tariffs on Canada and Mexico for February 4 but delayed them after both nations agreed to address fentanyl trafficking concerns. At a press briefing Wednesday, he stated that the tariffs would now take effect unless further action is taken by U.S. neighbors.
Commerce Secretary Howard Lutnick clarified that Canada and Mexico would need to provide proof of sufficient measures to curb fentanyl smuggling if they hope for another reprieve. “It’s going to be hard to satisfy,” Trump remarked, indicating skepticism about ongoing efforts.
Mexico Looks to Negotiate a Solution
In response, Mexican President Claudia Sheinbaum struck an optimistic tone, stating that her government remains hopeful for a resolution before the March 4 deadline. She confirmed that her security team is actively negotiating with U.S. officials in Washington, D.C., exploring options related to intelligence sharing, coordination, and trade.
“We are going to wait and see,” Sheinbaum said at her daily press briefing, emphasizing a strategy of patience and diplomacy. “As we always say: keep a cool head and remain optimistic that we can reach a deal.”
What This Means for Supply Chains
With tariffs set to take effect, North American supply chains face renewed uncertainty. Businesses reliant on cross-border trade should brace for increased costs and potential disruptions. Mexico’s auto sector and Canada’s manufacturing exports could see significant impacts, while the broader trade war escalation with China and the EU signals potential volatility in global logistics.
For supply chain leaders, the key takeaway is to remain agile, explore alternative sourcing strategies, and closely monitor ongoing negotiations to anticipate the next trade policy shift.
