Tariffs Get The Green Light

March 4, 2025

Tariffs On Goods Imported From Canada & Mexico Allowed To Go Into Effect

Following a 30-day delay on tariffs announced in early February, President Donald Trump announced that increased tariffs on goods imported from Canada and Mexico would be imposed beginning March 4, 2025, at 12:01 a.m. Eastern time.

Tariffs were imposed, then delayed, using a series of Executive Orders promulgated under the authority of various laws granting the president the power to set tariffs upon the declaration of a national emergency.

Tariff-Related Executive Orders & Their Impact

President Trump issued Proclamation 10886 on Jan. 20. This proclamation declared a national emergency at the United States’ border with Mexico, with respect to illegal drugs and illegal migration. Then, on Feb. 1, Trump signed Executive Order 14193 expanding the emergency concerning the flow of illegal drugs to the border with Canada.

Following these declarations, on Feb. 1, Trump signed Executive Orders 14193 and 14194. These orders imposed 25 percent tariffs on products of Canada and Mexico as referred to in the Federal Register, with an exception for Canadian energy products. Canadian energy products, which include “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,” are subject to 10 percent tariffs.

Moreover, the Executive Orders provide for a de minimis exception to the tariffs, generally a maximum of $800 worth of goods, for products shipped from Canada and Mexico to U.S. consumers. This arrangement will persist until the commerce secretary certifies that “adequate systems” are in place to process and collect the tax on these small amounts of goods.

Goods purchased for humanitarian purposes, informational materials such as publications, films, artworks, and products for personal use included in accompanying baggage of persons arriving in the United States, are not subject to the increased tariffs.

President Trump issued Executive Orders 14197 and 14198 on Feb. 3, 2025, which delayed the implementation of the aforementioned tariffs until 12:01 a.m. Eastern time on March 4, 2025. Those orders remain in place.

Increased Tariffs On Goods Imported From China

In a series of Executive Orders beginning Feb. 1, 2025, President Trump also invoked emergency authority to impose tariffs on products imported from China. The additional tariffs were announced through Executive Order 14195 on Feb. 1, at a rate of 10 percent. This Executive Order was further amended by an Executive Order on March 3, to provide for an additional 10 percent. The total additional tariffs imposed during 2025 on Chinese imports will be 20 percent.

The Executive Orders reference the national emergency declared by Proclamation 10886 with respect to fentanyl and other illegal drugs. Furthermore, it asserts that China has not taken “adequate steps” to alleviate this emergency through cooperative enforcement actions.

Similar to the tariffs announced on Canadian and Mexican products, tariffs imposed on Chinese products contain a de minimis exception for items valued less than $800, until such time as the commerce secretary certifies that adequate systems are in place to process and collect tariff revenue on the importation of these goods.

Retaliation

Companies that export products to Canada, Mexico, or China should consider the likelihood of retaliatory tariffs imposed by those countries. Leaders of all three countries have rejected the Trump Administration’s characterization of their countries’ impacts on the flows of illegal drugs and migrants into the U.S. Leaders from these countries have vowed retaliatory measures against U.S. imports to their countries.

Canada previously announced that if U.S. tariffs on Canadian goods went into effect, so too would 25 percent retaliatory tariffs targeting products such as Florida orange juice, Kentucky peanut butter and bourbon, Tennessee whiskey, coffee, appliances, apparel, cosmetics, motorcycles, and pulp and paper. Additional U.S. products could be targeted in a second, broader wave.

Mexican authorities have similarly announced plans to impose 25 percent tariffs on U.S. products. The Mexican government is still considering which products would be affected and plans to announce countermeasures on March 9.

China has announced retaliatory tariffs of 15 percent on U.S. exports of chicken, wheat, corn, and cotton, and 10 percent on sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy. These will be effective March 10. China is also suing the U.S. at the World Trade Organization. They allege violation of the 1994 Global Agreement on Tariffs and Trade.

What’s Next In Tariff News

While President Trump has made statements to the effect that foreigners would pay for these tariffs, legally these tariffs remain the liability of the importer of the goods. And, while the administration has made clear its belief that the cross-border flows of illegal drugs (and their precursor agents) and migrants constitute a national emergency that justifies the tariffs, the legal authority for steep tariffs on otherwise friendly countries remains untested. The administration, to date, has not made public any clear metrics by which it will measure whether Canada, Mexico, and China have addressed its concerns or alleviated the emergency, making the ultimate duration of these tariffs highly uncertain.

Companies will need to analyze the impact on their supply chains, to the extent they have not already done so. Companies will also have to determine whether some or all of the increased costs can be passed on to consumers, who are already nervous about persistent inflation and federal funding and employment disruptions. Companies should also consider making their concerns known to members of Congress or administration officials.

GBQ will continue to monitor the situation concerning tariffs on U.S. imports and exports. Do you have questions about how tariffs could affect your supply chain? Wondering about the impacts of these and other potential changes on your business? Need help ensuring compliance with new tariffs? Contact your GBQ advisor for assistance. Or click here to send a general request for information.