"He is very seriously contemplating kind of a shift in the NAFTA negotiations", Larry Kudlow, director of Trump's National Economic Council, said Tuesday on the Fox News program "Fox and Friends".
"His preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately". What's more, they can be narrowly tailored to fit the different economies of the two countries. In 2009, the Mexican government slapped tariffs on political important goods to protest the US's refusal to abide by North American Free Trade Agreement rules on trucking.
"We do seem to be at a little bit of a Rubicon moment in terms of whether or not the United States is going to fundamentally turn its back on this economic order", said Thomas Wright of the Brookings Institution think tank in Washington.
Hoffmann said American exports to Mexico have increased five-fold in the last 25 years.
"The world economic order is. under attack", Canada's Trade Minister Francois Philippe Champagne commented. Experts say that duty could usher in $100 million losses every year for USA pork farmers.
Three rounds of trade talks between the world's two largest economies to date have not yielded progress and Mr Trump's renewed tariff threat was seen as a non-starter for China. Also notable are job losses in agriculture, an industry that was a prime target of the retaliations set into motion by Mexico, the European Union, and Canada. On Tuesday, Kudlow doubled down.
Analysts say the tariffs are created to hit US Republican strongholds ahead of mid-term elections in November.
Expectations for a resolution of the trade row this week are low after finance leaders from the United States' G7 partners butted heads with U.S. Treasury Secretary Steven Mnuchin at a meeting last week in the Canadian resort town of Whistler, British Columbia.
There was shock when the world's largest economy confirmed it was imposing the duties on the EU, Canada and Mexico from 1 June, as part of President Donald Trump's protectionist agenda aimed at saving United States jobs.
Trump, who has vowed to protect USA industry and workers from what he describes as unfair worldwide competition as part of an "America First" agenda, is due to hold bilateral meetings with Trudeau and French President Emmanuel Macron during the summit, Kudlow said.
These are expected to target US-produced metals and other products such as jeans and whiskey.
During their exchange, Public Safety Minister Ralph Goodale accused Scheer of focusing on partisanship rather than maintaining a common front against American trade belligerence.
A senior official told The Canadian Press that the chances of striking any deal on NAFTA - ever - had "just fallen through the floor".
"The government commitment remains NAFTA", said one of several officials, all of whom spoke on condition of anonymity because of the sensitivity of negotiations and the ongoing efforts to manage relations with the U.S.
Trudeau was ready to fly to Washington to get final details settled on NAFTA last week, but says Vice-President Mike Pence told him the US would only agree to such a meeting if Canada accepted a sunset clause.