President Donald Trump’s threat of imposing "tariff bombs" on Mexico and Canada appears to be moving closer to action.

The Wall Street Journal (WSJ) reported on the 26th that momentum is building within Trump’s administration to impose a 25% tariff on Mexico and Canada starting this weekend, February 1.

This mirrors a recent incident where the Colombian government, after initially refusing to accept undocumented immigrants, conceded to U.S. demands just nine hours after being hit with a 25% tariff. Similarly, the administration may impose tariffs on Mexico and Canada before entering formal negotiations.

Notably, Howard Lutnick, the Commerce Secretary nominee with strong protectionist leanings, and Stephen Miller, Deputy Chief of Staff for Policy at the White House, are said to favor imposing tariffs before negotiations begin.

This approach diverges from the Wall Street expectation that Trump’s tariff threats were purely for leverage and unlikely to materialize.

One administration official stated, “President Trump is seriously considering implementing his tariff threat against Mexico and Canada, and we hope for their cooperation.” While the tariff threat may serve as a negotiation tactic, it is by no means an empty gesture, and tariffs may indeed be imposed before talks commence.

Trump’s demands to both nations include strengthening borders to prevent the inflow of drugs like fentanyl and illegal immigrants. Additionally, he insists on revising the United States-Mexico-Canada Agreement (USMCA) to promote U.S. manufacturing.

Canadian Prime Minister Justin Trudeau has already attempted to address the situation, visiting Trump’s Mar-a-Lago estate in Florida and promising to enhance border security and drug enforcement.

However, Canada is also reportedly considering retaliatory tariffs on U.S. imports, signaling resistance to Trump’s threats and a potential willingness to engage in a trade war with the U.S.

Trump, however, seems unbothered by Canada’s countermeasures. On the previous day, he remarked, “The U.S. doesn’t need Canadian cars, lumber, or even food. These same products are produced domestically in the U.S.”

Should a trade war between the U.S. and Canada erupt, it is expected to inflict greater damage on Canada. In 2023, Canadian exports to the U.S. amounted to 592.7 billion Canadian dollars (approximately 605 trillion KRW), accounting for more than three-quarters of Canada’s total exports.

Although concerns have been raised that imposing tariffs on Canadian imports could impact U.S. consumer prices, Trump’s administration believes the tariffs will boost U.S. revenue and revitalize domestic manufacturing.

The Mexican government is also on high alert. President Claudia Sheinbaum has expressed Mexico’s willingness to actively communicate with the U.S. regarding issues of illegal immigration and drug inflow.

Additionally, Mexico has announced plans to halt major investment projects by Chinese companies and replace imports from China with alternative sources, presumably with Trump’s administration in mind.

However, experts warn that if Trump’s tariff threats materialize, they could create chaos across North America’s entire automotive manufacturing sector.

The current free trade-based production model, where various parts cross borders multiple times before a vehicle is completed, could face existential threats.

Chris Desmond, a trade expert at PwC, remarked, “It’s unclear whether tariffs would be imposed each time goods cross the border. From the perspective of multinational corporations, this is a deeply concerning situation.”