The Trump Administration hinted at implementing its proposed 25% tariffs on Canadian imports in two phases that could begin within days, with another round of tariffs coming in April.
According to Commerce Secretary nominee Howard Lutnick, the first phase would be implemented as an emergency action to mitigate the fentanyl crisis as early as Feb. 1.
He confirmed that the U.S. is reviewing a broad range of tariff responses based on the outcome of a study on the issue that will be delivered to Trump by April 1.
U.S. President Donald Trump recently nominated Lutnick to lead his tariff policies who outlined what he intends to do during his Senate hearing on Wednesday.
The proposed two-phase plan means that even if tariffs on Canadian goods are pushed down the road from the beginning of next week, Canada will still be forced to face them by the spring.
“The (fentanyl) labs in Canada are run by Mexican cartels,” said Lutnick. “Respect America. If we are your biggest trading partner, show us the respect. Shut your border. And end fentanyl coming into this country.”
While the majority of fentanyl entering the U.S. is smuggled in through its southern border, authorities have expressed concerns regarding Canada’s escalating drug production.
U.S. law enforcement has also expressed its disappointment with its Canadian counterparts when it comes to cracking down on domestic money laundering activities carried out by international criminal organizations.
Lutnick acknowledged that both Canada and Mexico have begun responding to these issues such as Canada’s recent pledge to impose a suite of new border security measures, and U.S. tariffs are still most likely on their way.
“I know they are acting swiftly,” said Lutnick. “And if they execute, there will be no tariff. And if they don’t, then there will be.”
There are still many unresolved issues between Canada and the U.S. that will need to be addressed over the coming months, particularly regarding dairy and manufacturing, Lutnick noted.
Lutnick made clear at his confirmation hearing that there will be scores to settle with Canada in the spring, specifically mentioning dairy and auto manufacturing.
“Canada treats our dairy farmers horribly. That’s got to end,” he said Wednesday.
Additionally, he made clear his plans to bring auto manufacturing jobs back to the U.S. from Canada and Mexico.
“The car manufacturing went to Canada, it went to Mexico. It’s important that that come back to Michigan, come back to Ohio,” said Lutnik.
The commerce secretary nominee’s comments echoed that of Trump’s previous gripes regarding how auto trade was renegotiated during the Canada-United States-Mexico Agreement in 2018, with the new rules taking effect in 2020.
All of Ottawa’s previous negotiations with Trump’s administration to walk back the threat of tariffs have fallen on deaf ears thus far, with many officials being informed that their only chance would be for them to personally convince Trump.