U.S. Secretary of Commerce Howard Lutnick confirmed last weekend that the U.S. government will proceed with imposing a 25% tariff on all imported steel and aluminum as scheduled on March 12. Additionally, he revealed that from April, the U.S. plans to impose additional tariffs on Canadian dairy and lumber products.
Steel and Aluminum Tariffs Officially Implemented
President Trump signed an executive order on February 10, officially announcing a 25% tariff on all imported steel and aluminum, eliminating the tax-free quotas and exemptions enjoyed by some trade partners. Trump administration officials stated that this measure aims to prevent countries, including Russia, from circumventing current tariff policies.
Despite previous market doubts regarding the Trump administration's trade policies, fearing possible changes in stance, Lutnick made it clear that the steel and aluminum tariffs will not be delayed and will be implemented as planned.
Canadian and Mexican Goods Tariffs Tied to Fentanyl Issue
In addition to the steel and aluminum tariffs, the Trump administration has recently imposed new tariff measures on Canadian and Mexican goods. Last week, Trump announced a 25% additional tariff on products from these two countries, but goods meeting the conditions of the United States-Mexico-Canada Agreement (USMCA) may temporarily receive exemptions, expected to last until April 2.
At the White House, Trump stated that Canada has long "taken advantage" of the U.S. with its dairy and lumber tariffs, considering the trade situation "unfair." He emphasized that unless Canada reduces its tariffs, the U.S. will adopt a "reciprocal tariff" policy and may formally announce related measures in the coming days.
"Drug War" Not "Trade War"
Trump administration officials stated that this round of tariff measures is not only related to trade but also directly linked to the fentanyl issue. Lutnick pointed out that Trump hopes to use tariffs as leverage to encourage Canada and Mexico to take stricter measures to prevent undocumented immigration and illegal drug flow into the U.S. He stated, "If the flow of fentanyl stops, I think these tariffs will be lifted. But if the issue remains unresolved, the tariffs will continue until the President is satisfied."
Additionally, White House National Economic Council Director Kevin Hassett emphasized that the current policy of the Trump administration is a "drug war," not the "trade war" that markets fear. Hassett stated that if Canada and Mexico can effectively curb fentanyl smuggling and demonstrate their enforcement strength to Trump, the tariffs could be withdrawn.
Currently, the U.S. tariff policies on steel, aluminum, dairy, and lumber products have garnered widespread attention. How Canada and Mexico respond, and whether the Trump administration will adjust related policies after April, remain topics of close market focus in the coming weeks.
