President Donald Trump said Monday that sweeping tariffs on Canada and Mexico would go into effect Tuesday, 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, beginning just after midnight Tuesday, 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.

All about fentanyl?

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, 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.”

Trump did move forward with imposing a 10% tariff on all products from China, which triggered retaliation from that country.

He is now planning another 10% on all Chinese imports, which would come on top of the tariffs he imposed on many Chinese products in his first term.

Appeasing Trump

Canada and Mexico are both deeply dependent on exports to the United States, and Trump’s threats have whipped their governments into action. Delegations of officials have made trips to Washington in recent weeks, including to meet with Howard Lutnick, the commerce secretary.

Mexico had adopted a strategy of seeking to appease Trump on several fronts at once: taking action against fentanyl-producing cartels, curbing migration and limiting China’s economic sway. The Mexican government has unleashed a crackdown on criminal groups which manufacture fentanyl. In recent days, Mexican authorities handed over dozens of top cartel operatives to the United States and disclosed that they are accepting intelligence from CIA drone flights to hunt down others.

In Canada, the threat of tariffs has galvanized Prime Minister Justin Trudeau’s government, provincial politicians and businesses, and prompted a surge of patriotism and anti-American sentiment.

The Canadian government swiftly put together a plan to increase security at its border.

Because U.S. government statistics clearly show that Canada is not a significant route into the U.S. for drugs or migrants, Canadian officials have been able to claim success with their crackdown.

“We don’t have any data that suggests that there’s that number of fentanyl pills or products going south of the border,” Commissioner Mike Duheme of the Royal Canadian Mounted Police told The Globe and Mail, a Toronto newspaper.

Canada also has drawn up its own package of retaliatory tariffs, designed to maximize grief in U.S. states that are home to influential Republican politicians. There have also been suggestions that Canada may also cut off shipments of electricity, oil and gas, uranium or potash, a vital fertilizer for American farmers.