WASHINGTON, March 3 (Reuters) - U.S. President Donald Trump said on Monday that 25% tariffs on goods from Mexico and Canada will definitely take effect on Tuesday, raising fears of a trade war in North America and sending financial markets reeling.

“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’s comments sent U.S. stocks down sharply in late afternoon trading. The dollar rose against the Mexican peso and the Canadian dollar following his remarks.