Plastics and manufacturing groups that sighed in relief when President Donald Trump backed away from tariffs on Mexico and Canada might not want to get too comfortable. Trump is not done.
Peter Navarro, a top Trump adviser on trade and manufacturing issues, made that clear in a recent interview in Washington. He told an audience at a Politico trade policy event on Feb. 2 — the day after Trump put a monthlong pause on 25 percent duties on our North American economic partners — that the president has big plans for tariffs, going so far as to say they want duties on imports to replace some income tax revenue.
"Tariff revenues are going to play a very important role, and it's going to be part of a long-term transition," Navarro said, framing tariffs as tool for many challenges, including illegal drugs, unauthorized migration and the economy. He repeatedly pointed the audience to Trump's Jan. 20 "America First Trade Policy" executive order as outlining many steps the administration can take on trade policy, including detailed reviews of potential currency manipulation and rules on foreign investment.
But he mentioned tariffs a lot, saying they're part of a structural shift in U.S. government funding the administration wants.
"If President Trump succeeds like he wants to succeed, we are going to structurally shift the American economy from a country overreliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenues and the External Revenue Service," Navarro said.
As we noted in our coverage of Trump's decision, plastics and manufacturing associations said the tariffs would raise prices and harm the highly interconnected industrial supply chains across the three countries. The Plastics Industry Association warned that blanket tariffs could have "significant economic harm," the National Association of Manufacturers said small manufacturers would be particularly severely affected, and the U.S. Chamber of Commerce flat out said "tariffs are not the answer."
Experts warned of much higher car prices and said the auto industry could start to see shutdowns within a week of the tariffs hitting the finely calibrated cross-border supply chains. The U.S. Chamber also argued bluntly that tariffs "won't solve" the drug and migration problems Trump is targeting.
In his remarks, Navarro, who has the title of senior counselor on trade and manufacturing, said one goal of the tariffs was stopping fentanyl from crossing the U.S. border. But the Politico journalist questioning him pointed to U.S. government data showing that only 0.2 percent of fentanyl seized at U.S. crossings in fiscal year 2024 was at the Canadian border.
Whether Trump got spooked by the stock market dropping or this is part of a negotiating strategy, the tariffs in North America were put on hold, although a 10 percent tariff on China did go ahead.
Navarro said the confusion is part of a plan: "When he does stuff and it looks like it's a little chaotic, it's not. It's genius."
The Trump adviser framed the tariffs as a key part of a strategy to deal with 75,000 deaths in the U.S. each year from fentanyl, to have tighter border control and as a way to build fair trade.
"I refer you back to the presidential memo on day one," he said. "We're going to handle the problems that unfair trade inflict, and that's the proper word, upon the American people through a dozen different kinds of approaches."
He called this most recent batch of tariffs on Canada, China and Mexico one that is "explicitly to deal with the drug war."
But Navarro also noted other administration efforts coming will look at tariffs on steel, aluminum and critical minerals.
As well, he said the Office of the U.S. Trade Representative will do a detailed review of the tariffs from Trump's first term, and he didn't rule out more tariffs coming, including for the European Union and United Kingdom.
Of course not everyone, even some key trade figures in Trump's party, are sold on the wisdom of broad-based import duties. The Republican chairman of the House Ways and Means trade subcommittee, Rep. Adrian Smith, R-Neb., told the Politico audience that even if they don't like tariffs, they should "come to terms" with them.
"I've long said I'm not a huge fan of tariffs," Smith said. "I do understand they need to be a tool in the toolbox, and I think we need to come to terms with the fact that President Trump is going to use those tools."
In Trump's first term, it took months for the details of his tariff plans to surface. This time, it's two weeks. Clearly, no one who cares about tariffs should get comfortable.
Steve Toloken is a Washington-based Plastics News assistant managing editor.