President Donald Trump said Monday that sweeping tariffs on Canada and Mexico would go into effect today, stating in remarks at the White House there was no chance for a last-minute deal to avert the levies.

“The tariffs, you know, they’re all set,” Trump said. “They go into effect tomorrow.”

Trump has proposed adding a 25% fee on all Mexican and Canadian exports coming across those borders and an additional 10% for Chinese goods that begun just after midnight today, saying those countries have not done enough to stem the flow of drugs and migrants into the United States.

The move will increase the levies that the United States charges on foreign goods to levels not seen at least since the 1940s, and is likely to shatter regional supply chains and raise the cost of products ranging from automobiles to breast pumps and vegetables.

The tariffs are also expected to further deteriorate the U.S. relationship with its two closest neighbors, whose economies are stitched together across North America. Leaders from Canada and Mexico have been scrambling to persuade Trump to change his mind by devoting more resources to policing the border.

Canada, Mexico and China account for more than 40% of U.S. imports, and economists have said that stiff tariffs could send the Canadian and Mexican economies into a recession.

Trump’s announcement sent stock markets tumbling, with the S&P 500 falling 1.8%, its worst one-day drop so far this year.

“So much for tariffs being just bluster and a bargaining tool,” said Eswar Prasad, a professor of trade policy at Cornell University. “U.S. trading partners are clearly going to face monumental challenges in appeasing Trump and getting him to back off from using tariffs as a broad tool to influence their policies.”

For weeks, Trump has described the tariffs as way to pressure Canada, China and Mexico to crack down on fentanyl and illegal immigration. But on Monday, at an event celebrating a U.S. investment by a Taiwanese chip manufacturer, Trump appeared to change the terms, saying Canada and Mexico needed to relocate auto factories and other manufacturing to the United States.

“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,” he said.

He added that companies would be “much better off building here, because we have the market. We’re the market where they sell the most.”

Trump had threatened to impose the levies on the three countries beginning Feb. 4. But he decided to pause them on Canada and Mexico for one month after both countries promised measures, like Mexico’s sending more troops to the border and Canada’s appointing a “fentanyl czar.”