President Trump signed three executive orders Saturday imposing duties on all imports into the United States from Canada, Mexico, and China. Citing the extraordinary threat posed to U.S. national security by illegal immigration and drugs smuggled across the border, particularly fentanyl, President Trump invoked the International Emergency Economic Powers Act (IEEPA) to declare a national emergency and impose these tariffs. The following duties will be imposed in addition to any other applicable duties or tariffs currently in effect:
- Products of Canada (except for energy or energy resources): 25 percent ad valorem
- Canadian energy/energy resources (crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals): 10 percent ad valorem
- All products of Mexico: 25 percent ad valorem
- All products of China: 10 percent ad valorem
These additional duties take effect with respect to goods from Canada and China entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on February 4, 2025.
On Monday morning, February 3, 2025, President Trump announced a “pause” in the implementation of these tariffs with respect to products of Mexico for a one-month period after Mexican President Sheinbaum agreed to commit 10,000 members of the Mexico National Guard to reinforce the U.S.-Mexico border. This development underscores that the tariff policy of the new Administration and its implementation represent a fluid situation.
Limited Exceptions Apply
Canadian and Chinese goods entered after 12:01 a.m. Eastern Time that were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. Eastern Time on Saturday, February 1, will not be subject to additional duties if the importer certifies as such to Customs and Border Protection (CBP).
Furthermore, importers have some flexibility in selecting the entry date of merchandise when filing entry documentation so long as merchandise has already physically arrived within port limits with the intent to unlade. Imports for consumption with entry dates prior to February 4, 2025, will not be subject to additional duties.
Further Details Regarding Applicable Duties
The executive orders further provide that:
- Articles that are subject to these additional duties and are admitted into a United States foreign trade zone (FTZ) on or after 12:01 a.m. eastern time on February 4, 2025, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41. Upon entry for consumption, such articles will be subject to the rates of duty related to the classification under the applicable Harmonized Tariff of the United States (HTSUS) subheading in effect at the time of admittance into the FTZ.
- No duty drawback will be available with respect to the duties imposed under these orders.
- The additional duties imposed under these orders apply to all products of Canada, Mexico, and China. The duty-free de minimis exception for low-value shipments under $800 does not apply to products covered by these orders.
Retaliatory Tariffs
The executive orders state that the President may increase or expand the scope of the duties imposed should Canada, Mexico, or China “retaliate against the United States . . . through import duties on United States exports” to Canada, Mexico, or China.
Despite the threat of further increased duties, Canada has already imposed 25 percent retaliatory tariffs on specific goods from the United States, which also take effect on February 4, 2025. These tariffs affect $30 billion of goods imported into Canada from the United States. Additional Canadian tariffs affecting another $125 billion of imports from the United States are expected later this month.
Mexico has announced that it would also impose retaliatory duties, but thus far has not issued further details. Given the “pause” in the implementation of tariffs on imports from Mexico, the parameters of Mexico’s potential retaliatory actions remain unclear.
China has announced that it intends to challenge the additional tariff on Chinese goods at the World Trade Organization, but has been more circumspect with respect to possible retaliatory measures and the timing of such actions.
Further tariff actions by the Trump Administration with respect to Canada, Mexico, and China, as well as with other trading partners, are expected in the coming weeks and months. Contact us if you have any questions about these new developments, including how to evaluate whether your imports may be subject to the additional duties and what changes to your supply chain may offer relief from the additional duties.
This Insight post has been updated February 3, 2025, to reflect the announced “pause” on tariffs applicable to products of Mexico.