Trump team signals no reprieve from tariffs amid manufacturing shift back to U.S.

The Trump administration Monday showed no signs of backing away from a plan to impose tariffs on Canada, Mexico and China beginning Tuesday.

The proposal has prompted a shift in manufacturing back to the U.S., while economists warn consumers could face steep price increases.

Honda announced Monday it will manufacture its new Civic hybrid in Indiana rather than Mexico to dodge Mr. Trump’s 25% tariff on Mexican goods that is set to begin at midnight.

The car maker’s shift to the U.S. follows a move by Taiwan Semiconductor, the largest chip maker in the world, to start producing its product in the U.S., also to avoid facing the new tariffs.

In addition to Mr. Trump’s plan to impose tariffs on Mexico, he intends to slap a 25% tariff on Canadian goods and an additional 10% duty on imports from China starting Tuesday.

European Union nations could face 25% U.S. tariffs on certain goods beginning in April as a reciprocal move in response to the heavy tariffs the EU imposes on many U.S. goods, Mr. Trump said.

“It’ll be 25% generally speaking and that will be on cars and all other things,” Mr. Trump said last week.

Appearing on CNN Monday, Commerce Secretary Howard Lutnick suggested there will be no last-minute reprieve from the tariffs and said the revenue raised by them will be used to eliminate federal taxes on Social Security and tipped wages.

“Let’s let outside people who live and breathe our economy, let’s let them start paying and reduce the tax burden on Americans,” Mr. Lutnick said.

The tariffs are one of the president’s main initiatives in his “America First” agenda, which is aimed at protecting and increasing U.S. manufacturing jobs.

Economists, however, warn the tariffs will spike costs significantly for U.S. consumers.

The Tax Foundation estimates the tariffs will amount to a $100 billion tax increase in 2025 and will reduce after-tax incomes by 0.7% on average.

While Mr. Trump is committed to the tariffs, the exact level could shrink from the 25% threat, Mr. Lutnick suggested in an interview on Fox News Sunday Morning Futures.

“There are going to be tariffs on Tuesday on Mexico and Canada,” Mr. Lutnick said. “Exactly what they are, we’re going to leave that for the president and his team to negotiate.”

Mr. Trump initially threatened the tariffs in response to fentanyl pouring over the border from Mexico and to a much lesser extent, from Canada.

The president paused the tariffs in February for one month after both countries announced plans to beef up border security and anti-drug trafficking measures.

Mr. Trump has complained the U.S. is treated unfairly by other countries when it comes to trade policy.

Canada imposes steep tariffs on many U.S. goods including dairy and other agricultural products, as well as lumber, metals and shoes.

The European Union has imposed significant tariffs on U.S. goods, including automotive products, motorcycles, plastics and aircraft.