Canada-Mexico Tariffs Go Into Effect
President Trump announced that tariffs on Canadian and Mexican imports will go into effect today, with no further room for negotiation. These tariffs, aimed at curbing fentanyl flow, are set at 25% for most goods from these countries, with Canadian energy exports facing a 10% duty. The 10% tariff on Chinese imports will also rise to 20% on the same date. The Executive Order and CBP notice require that products from Canada and Mexico admitted into U.S. foreign trade zones after their respective dates must have "privileged foreign status," making them subject to duties upon entry for consumption. No duty drawback is available for the additional tariffs imposed under the Executive Order. While Mexico’s de minimis exemption remains available for eligible goods, Canada’s exemption was revoked effective February 4, requiring applicable duties and taxes on affected shipments. In response to U.S. President Donald Trump's imposition of 25% tariffs on Canadian imports, Prime Minister Justin Trudeau announced that, starting Tuesday, Canada will enforce 25% tariffs on C$30 billion worth of U.S. goods, with plans to extend these tariffs to an additional C$125 billion in 21 days. Similarly, Mexican President Claudia Sheinbaum has condemned the U.S. tariffs and stated that Mexico will implement retaliatory measures, with specific details to be announced on Sunday during a public event in Mexico City's central plaza. Read the guidance for the Mexico tariffs here and the guidance for the Canada tariffs here. The CBP guidance for Canada can be found here and the CBP guidance for Mexico can be found here. China Faces 10% Increase in Tariffs
However, China has not made a formal offer to address the fentanyl issue, which has stalled direct talks with President Xi. The tariff moves have sparked concerns from lawmakers, business groups, and trade experts, warning of potential economic harm, including increased costs for consumers and businesses. The previously released CBP notice confirms that additional duties on Chinese imports are not eligible for duty drawback, meaning importers cannot claim refunds on these tariffs for re-exported goods. Products subject to these tariffs also do not qualify for the de minimis exemption, preventing duty-free entry for shipments under $800. Additionally, goods entering U.S. Foreign Trade Zones (FTZs) must be admitted under privileged foreign status, ensuring they are subject to the additional tariffs upon entry for U.S. consumption. Trump Releases 2025 Trade Policy Agenda
United States Trade Representative Jamieson Greer presented the 2025 Trade Policy Agenda, the 2024 Annual Report, and the "WTO at Thirty" report to Congress. The Trade Policy Agenda outlines the Trump Administration's vision for trade, addressing economic and national security challenges and advocating for rebalancing trade through the "America First Trade Policy." The 2024 Annual Report summarizes the USTR's activities in the past year, while the "WTO at Thirty" report discusses the challenges facing the World Trade Organization and the need for reform. Greer emphasized the importance of President Trump's trade policies in boosting American workers and businesses, focusing on strategies to tackle trade deficits, promote manufacturing, and strengthen national security. The agenda highlights the goal of fostering a "Production Economy," increasing wages, creating jobs, and boosting innovation, addressing unfair trade practices and leveraging tariffs to protect U.S. interests. New Section 232 Investigations on Lumber and Copper
President Donald Trump has initiated Section 232 investigations into imports of timber, lumber, and copper to assess their impact on U.S. national security. The timber and lumber investigation, launched on March 1, 2025, aims to evaluate the effects of imports on domestic production capabilities and national defense, with a report due within 270 days. Concurrently, an investigation into copper imports was started on February 25, 2025, to determine their national security implications, and findings were expected within 270 days. Both investigations may lead to recommendations for trade remedies, including tariffs, export controls, or measures to bolster domestic production. * * * * Do the outlined trade issues impact you? Please contact Sarah Helton, Michael Best Strategies’ Trade Practice Lead at sarah.helton@michaelbest.com for assistance. |