Trump says Canada, Mexico tariffs to take effect on Tuesday

Trump's comments sent U.S. stocks down sharply in late afternoon trading. The Mexican peso and Canadian dollar both fell following his remarks.

"They're going to have 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," Trump said at the White House.

He said there was "no room left" for a deal that would avert the tariffs by curbing fentanyl flows into the United States.

Trump also said reciprocal tariffs would take effect on April 2 on countries that impose duties on U.S. products. He also reaffirmed that he will increase tariffs on all Chinese imports to 20% from the previous 10% levy to punish Beijing for continued shipments of fentanyl to the U.S.

Trump said China "has not taken adequate steps to alleviate the illicit drug crisis."

CEOs and economists say Trump's tariffs on Canada and Mexico, covering more than $900 billion worth of annual U.S. imports, would deal a serious setback to the highly integrated North American economy.

The tariffs are scheduled to take effect at 12:01 a.m. EST, on Tuesday, the Trump administration confirmed. At that point Canada and Mexico face tariffs of 25%, with 10% for Canadian energy.

Mexican officials did not immediately respond to requests for comment.

Canadian Foreign Minister Melanie Joly told reporters that Ottawa was ready to respond. "There's a level of unpredictability and chaos that comes out of the Oval Office, and we will be dealing with it," she said.

The Dow Jones Industrial Average, fell 649.67 points, or 1.48%, the S&P 500 lost 104.78 points, or 1.76%, and the Nasdaq Composite dropped 497.09 points, or 2.64%.

Automaker shares fell sharply, with General Motors, which has significant truck production in Mexico, down 4% and Ford falling 1.7%.

Gustavo Flores-Macias, a public policy professor at Cornell University, said consumers could see price hikes within days.