US braces for new Trump tariffs as deadline nears

Trump has set a Saturday deadline to impose the punitive duties over his demands that Canada and Mexico take stronger action to halt the flow of illegal immigrants and the deadly opioid fentanyl and precursor chemicals into the US.

The tariffs are designed to stop the flow of the deadly opioid fentanyl into the US. (AP PHOTO)

Trump said on Thursday he still is considering an additional 10 per cent tariff on Chinese imports to punish Beijing for its part.

Industry groups were furiously seeking any scrap of information on how Trump plans to implement the tariffs - whether he would impose the full 25 per cent with immediate effect, or announce them and delay their implementation to allow some time for negotiations over steps that the countries could take.

Even immediate imposition would require two to three weeks of public notice before US Customs and Border Protection could begin collections, based on past tariff actions.

Trump said on Thursday that he would soon decide whether to apply the tariffs to imports of Canadian and Mexican oil, an indication that he may be concerned about their impact on petrol prices. Crude oil is the top US import from Canada and among the top five from Mexico, according to US Census Bureau data.

Trump's top trade adviser Peter Navarro said on Friday that tariff revenue will help pay for the extension of Trump's 2017 tax cuts, which total some $US4 trillion ($A6.4 trillion) and expire this year.

There are fears the tariffs will push up prices of Canadian imports like aluminium, lumber and cars. (AP PHOTO)

"President Trump has a great new tax cut, the largest in history, and tariffs can easily pay for that," Navarro said on CNBC.

Two sources familiar with the matter said that Trump was expected to invoke the International Emergency Economic Powers Act (IEEPA) as the legal basis for the tariffs, declaring a national emergency over fentanyl overdoses that killed nearly 75,000 Americans in 2023 and illegal immigration.

The statute, enacted in 1977 and modified after the 9/11 attacks in 2001, gives the president broad powers to impose economic sanctions in a crisis.

Imposing the duties would tear up a 30-year free trade system that has built a highly integrated North American economy, with auto parts sometimes crossing borders several times before final assembly.

Economists and business executives have warned that the tariffs would spark major increases in the prices of imports such as aluminium and lumber from Canada, fruits, vegetables, beer and electronics from Mexico and motor vehicles from both countries.

Tariffs are paid by firms that import goods and pass the costs on to consumers or accept lower profits, economists say.

"President Trump's tariffs will tax America first," said Matthew Holmes, public policy chief at the Canadian Chamber of Commerce. 

"From higher costs at the pumps, grocery stores and online checkout, tariffs cascade through the economy and end up hurting consumers and businesses on both sides of the border. This is a lose-lose."

During Trump's first term, the EU hit iconic American products including bourbon whiskey. (AP PHOTO)

Canada has drawn up detailed targets for immediate tariff retaliation, including duties on orange juice from Florida, Trump's adopted home state, a source familiar with the plan said. Canada has a broader list of targets that could reach $C150 billion ($A166.25b) worth of US imports, but would hold public consultations before acting, the source said.

During Trump's first term, China targeted US soybeans and other farm products, while the European Union hit iconic American products including bourbon whiskey and Harley-Davidson motorcycles.

Mexican President Claudia Sheinbaum has said Mexico also would retaliate, arguing that Trump's tariffs would cost 400,000 US jobs and drive up prices for US consumers.

But more recently, Sheinbaum has publicly doubted that Trump will follow through on his pledge to impose the tariffs, saying:

"We don't believe it will happen, honestly."

China has been more circumspect about its retaliation plans. Liu Pengyu, a spokesperson for China's embassy in Washington, emphasised China's cooperation with the US on curbing fentanyl trafficking and said he hopes the US "will not take China's goodwill for granted."