Additional details concerning the new tariffs assessed by the new Administration are now forthcoming. The White House just announced an implementation of "a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff." This information can be found here. The Executive Orders pertaining to the tariffs for Canada and Mexico can be found here (Canada EO, Mexico EO). The White House explained that tariffs are being implemented because of "[t]he extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, [which] constitutes a national emergency under the International Emergency Economic Powers Act (IEEPA)." The effective date for all the tariffs will be February 4th, 2025 (excluding items already in transit).
While some of this information was widely reported on Friday, new details have emerged which are critical for the trade community; many items also remain unclear.
It appears each Executive Order for China, Mexico, and Canada (signed today) includes provisions for additional retaliatory tariffs on top of the newly imposed tariffs should the target countries respond in kind.
Duty drawback privileges have been denied for these new tariffs being imposed.
De Minimis clearance for imports $800 or less in value will be revoked for products subject to tariffs from the target countries; e-commerce clearances will be impacted for these countries and such imports will require traditional entry reporting and deposits of all duties and fees.
The duration of the tariffs remains unclear as each target country has been reporting proposals to address immigration and drug interdiction. It remains unclear how long these countermeasures will remain in effect, and whether the escalation clause will deter each of the countries from retaliating.
The tariffs will apply to products of Canada, Mexico, and China. It remains unclear how this will be determined in the context of the USMCA and other standards for origin determination for purposes of implementing the tariffs
As of this publication, the Executive Order for China has not been published, and it remains unclear what scope of products are covered (i.e., only those previously subject to Section 301 tariffs or all products of Chinese origin.)
The Department of Homeland Security is directed to implement the tariffs and announce additional details in a forthcoming Federal Register notice.
We will continue to monitor this matter and provide substantive updates. Should you have any questions concerning these developments, please contact one of the trade professionals listed here.