Commerce Secretary Howard Lutnick said Canada and Mexico will be able to avoid 25 percent tariffs if they prove to the U.S. administration they have taken sufficient action on border security and fentanyl, which President Donald Trump said would be difficult to do.
Speaking to reporters during a cabinet meeting on Feb. 26, Lutnick acknowledged that Canada and Mexico have been “working hard on the border.” While Trump had planned to impose 25 percent tariffs on the two countries on Feb. 4, they were able to secure a one-month pause on Feb. 3.
“At the end of that 30 days, they have to prove to the president that they’ve satisfied him to that regard. If they have, then he’ll give them a pause, or he won’t,” Lutnick said.
“It’s gonna be hard to satisfy,” Trump interjected.
Trump had been asked by reporters earlier during the cabinet meeting whether he would continue the pause on tariffs given the decrease in illegal crossings.
“I’m not stopping the tariffs,” he said, adding that “not all of them, but a lot of them” would kick in on April 2.
Lutnick later differentiated between the “fentanyl-related” tariffs that are paused until March 4, and the “big transaction” tariffs to come on April 2. Trump signed a trade memorandum on Jan. 20 for the United States Trade Representative and Commerce Department to study using tariffs to reduce trade deficits with other countries, which will be completed by April 1.
On Feb. 13, Trump also signed a memorandum for the government agencies to investigate harmful non-reciprocal trade practices, and within 180 days come up with an assessment of fiscal impacts.
Just days ago on Feb. 24, when asked if Canada and Mexico had done enough on border security to prevent 25 percent tariffs from being implemented on March 3, Trump said the United States was “on time with the tariffs.”
Trump said that countries like Canada had taken “advantage” of the United States through trade deals, but did not mention border security. He then said the United States wanted to see “reciprocity” on trade, suggesting that he was referring to the reciprocal tariffs he plans to place on countries.
In addition to these tariffs, Trump has also announced 25 percent tariffs on steel and aluminum imports, which would take effect on March 12.
Border Security
Since November when Trump first mentioned his plans for tariffs, Canadian officials have been attempting to prevent 25 percent tariffs from being placed on the country. Back in December, Ottawa announced a $1.3 billion border security package that included the creation of a new North American task force targeting organized crime and synthetic drug trafficking, as well as 24/7 border surveillance.In his last-minute phone call with Trump on Feb. 3, Prime Minister Justin Trudeau also promised to appoint a “fentanyl czar” and designate drug cartels as terrorist organizations, which the government later did.
When announcing the deal, Trump said the tariffs would be paused until a “final economic deal” could be made with Canada. Trump would need to sign another executive order to prevent the tariffs from being implemented on March 4.
The Trump administration has floated several economic issues it would like to see Canada make concessions on, such as its supply management system that involves tariffs on dairy and poultry products. Trump has also said he would like to bring auto manufacturing back to the United States, and has criticized Canada for impeding American banks from doing business in the country.
Speaking to reporters on Feb. 26, Trump once again referred to Trudeau as “Governor Trudeau” and said Canada should be made into the 51st state.
“I love the people of Canada, but honestly, it’s not fair for us to be supporting Canada. And if we don’t support them, they don’t subsist as a nation,” he said.
