US Tariffs of 25% on Canada and Mexico, 10% on China

February 1, 2025

The Executive Order introduces 25% tariffs on imports from Canada and Mexico, 10% tariffs on imports from China, and eliminates the de minimis exemption for low-value shipments.

Key Points:

• Tariffs Imposed: A 25% tariff on imports from Canada and Mexico, with energy and energy resources from Canada having a lower 10% tariff, and a 10% tariff on imports from China, effective from early February 2025.

• De Minimis Exemption Suspended: The suspension of the duty-free exemption for low-value shipments under $800.

• National Emergency Expansion: The order expands the national emergency declared in January 2025 to include the northern US border.

Implications:

• Supply Chain Disruptions: Businesses importing goods from Canada, Mexico, and China should expect increased costs due to the new tariffs, and also potential supply chain adjustments.

• Compliance Requirements: Companies will need to review and possibly revise their import practices to comply with the suspension of the de minimis exemption.

• Legal and Trade Considerations: The use of the International Emergency Economic Powers Act (IEEPA) to impose these tariffs may lead to legal challenges and will have additional ongoing consequences for international trade.

Further Actions:

• Assess Business Impact: Evaluate the potential cost increases due to tariffs and the supply disruption risks. Develop strategies to mitigate the negative impact and to prepare for additional changes in the global trade backdrop.

• Review Import/Export Procedures: Ensure all shipments, regardless of value, are accurately documented and duties are appropriately.

• Monitor Legal Developments: Stay informed about any legal challenges to the Executive Order and be prepared to adjust business practices accordingly.

Frequently Asked Questions (FAQ)

1. Which industries or sectors are most affected by this policy?

   Industries heavily reliant on imports from Canada, Mexico, and China, such as manufacturing, retail, and automotive sectors, are likely to be most impacted due to increased costs from the imposed tariffs.

2. What are the immediate actions required to comply?

   Businesses should review their supply chains to understand the impact of the new tariffs, ensure all imports are properly declared with duties paid following the suspension of the de minimis exemption, and consider alternative sourcing strategies if necessary.

3. Are there any penalties or fines for non-compliance?

   Failure to comply with the new import duties and regulations could result in penalties, including fines and seizure of goods by customs authorities.

4. Does this policy override previous regulations?

   Yes, this Executive Order supersedes previous regulations regarding the de minimis exemption for low-value shipments, requiring all imports to be declared and duties paid regardless of value.

5. Where can I find official guidance or templates for compliance?

   Official guidance and compliance resources can be found on the U.S. Customs and Border Protection (CBP) website and through industry trade associations.