Trump's comments made on Monday sent US stocks down sharply in late afternoon trading. The Mexican peso and Canadian dollar both fell following his remarks.

"They're going to have to have a tariff. So 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," Trump said at the White House.

He said there was "no room left" for a deal that would avert the tariffs by curbing fentanyl flows into the United States.

Trump also reaffirmed that he would increase tariffs on all Chinese imports to 20 per cent from the previous 10 per cent levy to punish Beijing for failing to halt shipments of fentanyl to the US.

The president said in an order that China "has not taken adequate steps to alleviate the illicit drug crisis."

CEOs and economists say Trump's tariffs on Canada and Mexico, covering more than $US900 billion ($A1.4 trillion) worth of annual US imports, will deal a serious setback to the highly integrated North American economy.

With AAP.