Donald Trump has confirmed 25% tariffs on goods from Mexico and Canada, taking effect at 5am UK time on Tuesday.
The US president confirmed the tariffs in a speech at the White House – and his announcement sent US stocks down sharply.
The tariffs will be felt heavily by US companies which have factories in Canada and Mexico, such as carmakers.
Mr Trump said: “They’re going to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.”
There’s “no room left” for a deal that would see the tariffs shelved if fentanyl flowing into the US is curbed by its neighbours, he added.
As of 12:01am Eastern Standard Time (5.01am GMT), Mexico and Canada face tariffs of 25%, with 10% for Canadian energy, the Trump administration confirmed.
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Mr Trump’s speech stoked fears of a trade war in North America and sent financial markets reeling.
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Markets the Dow Jones Industrial Average, and the Nasdaq Composite fell by 1.4% and 1.76% respectively.
The share prices for automobile companies including General Motors, which has significant truck production in Mexico, Automaker and Ford also fell.
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Consumers in the US could see price hikes within days, an expert has said.
Gustavo Flores-Macias, a public policy professor at Cornell University, New York, said “the automobile sector, in particular, is likely to see considerable negative consequences”.
This is due to supply chains that “crisscross the three countries in the manufacturing process” and ” because of the expected increase in the price of vehicles, which can dampen demand,” he added.
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The Trump administration is gearing up to bring in other tariffs in the coming weeks.
On 2 April, reciprocal tariffs will take on effects on all countries that impose duties on US products.
And the US president is planning to double tariffs on Chinese imports, raising them from 10% to 20%.
He is also considering 25% tariffs on goods from the EU “very soon” after claiming the bloc was created to “screw the United States”.
