On Saturday, President Trump followed through on his pledge to implement additional tariffs on products of Canada, Mexico, and China origin. Both Canada and Mexico are slated to be assessed additional tariffs of 25%, though imports of Canadian energy products such as crude oil and uranium will be set at 10%. Chinese products will face an additional tariff of 10% across the board. The President imposed the tariffs by executive order under authority provided by the International Emergency Economic Powers Act (IEEPA). Presidents have broad authority on tariff policy, and IEEPA further expands the President’s authority on trade policy.
The additional tariffs are to be effective for goods entered or withdrawn for consumption on Tuesday, February 4. There is an exception to the tariffs for goods that were “loaded onto a vessel at the port of loading or in transit on the final mode of transport…before 12:01 on February 1, 2025”. This is an important exception for goods of Chinese origin already in transit and goods currently being held in the US under a warehouse entry. This will have a much lower impact on goods crossing the northern or southern borders. Importers must be able to certify their goods were in transit prior to February 1 to avoid the tariffs.
We assume that provisional numbers will be assigned to the affected products and that the new tariffs may be in place before Customs and the trade community can reprogram their systems to manage the new tariffs. This will create problems for filers, who may have to submit some entries without including the additional tariffs and then submit a correction once the systems are ready. Historically, the release or import date of goods has determined the applicable HTS and duty rate so processing systems will need to recognize the importance of the export date when applying these tariffs.
Canada has already produced a list of US products to be slapped with additional tariffs, and Mexico has indicated they will also implement tariffs on US goods. China has denounced the additional tariffs and stated they will challenge the tariffs at the World Trade Organization (WTO) and take other “unspecified countermeasures.” WTO decisions are currently mostly symbolic since there is no mechanism to appeal or enforce their decision. The White House has indicated that retaliatory tariffs levied on US goods from the affected countries could result in increased or expanded tariffs.
The executive orders authorizing the additional tariffs do not include a mechanism allowing for importers to seek exemptions.
You may access the executive orders via the links below:
Best Regards,
Sam McClure, LCB
Director of Compliance & Customs Services