US hints that tariffs on Mexico and Canada could be lower than 25%

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President Donald Trump will impose tariffs on Mexico and Canada on Tuesday but is still deciding on the levels, commerce secretary Howard Lutnick has said.

Mexico and Canada have done “a lot” to address Trump’s concerns about border crossings but not enough to address his worries about “fentanyl deaths in America”, Lutnick said on Fox’s Sunday Morning Futures show.

Lutnick said Trump was thinking about “how exactly he wants to play it with Mexico and Canada, and that is a fluid situation”.

Trump has also vowed to impose additional 10 per cent tariffs on China on Tuesday, which is “set”, Lutnick said. Those tariffs come on top of 10 per cent tariffs he already imposed this month.

Trump has previously proposed imposing 25 per cent tariffs on Mexico and Canada, but Lutnick indicated that the figure could be lower. His remarks suggest Mexico and Canada will make a last-ditch diplomatic push to try to avert the measures, which Trump delayed once before last month.

“He’s going to think about it. He’s going to put them into place on Tuesday. The Canadians and the Mexicans have been talking to him,” Lutnick said.

Mexico last week extradited dozens of prisoners to the US, including a drug trafficker wanted since the 1980s, in a bid to try to ward off the expected tariffs.

Trump also indicated he may extend his global trade war to Canada’s lumber industry after directing the commerce department to probe dumping into the US market.

China, meanwhile, does not appear to have any room to manoeuvre before Tuesday.

“They either end the subsidies and they end making these ingredients from fentanyl, or he’s going to put tariffs on there,” Lutnick said.

China has vowed to take countermeasures to defend its interests. Beijing said last week it has tightened controls on precursor chemicals and fentanyl-like substances.

“If they think they’re going to retaliate, remember they have so much more that they sell to us than we sell to them,” Lutnick said.

In a poll released Sunday by CBS, Trump got narrowly positive ratings for handling the economy, but not on inflation.

Fifty one per cent of Americans indicated they approved of his handling of the economy but 46 per cent said they approved of how he is tackling inflation.

The survey found that Democrats and Republicans overwhelmingly want Trump to focus on the economy and inflation but a much lower percentage think he is actually prioritising those areas, focusing more on the border, tariffs and the federal workforce.