At the time of the publication of this blogpost on February 1, 2025, Mexico, Canada, and China have not yet responded to the imposition of tariffs. Stay tuned for updates and insights and practical tips for trade between the United States and these three countries as the situation develops.

President Trump signed executive orders today, February 1, 2025, imposing the long-anticipated tariffs he has called for on Canada, Mexico, and China since early in his 2024 Presidential Election campaign.  The action creates significant volatility for the North American market, as Canada and Mexico have vowed to retaliate to the tariffs in the days leading up to the announcement. We will update this blog as more information comes out, including how Canada, Mexico, and China respond to the tariffs.

President Trump has justified the imposition of the tariffs by stating that Canada and Mexico had failed to stem the flow of migrants without status into the United States and that the two countries, along with China, had failed to prevent fentanyl from being imported into the country.  As a result, President Trump has invoked the International Emergency Economic Powers Act to order the following tariffs be imposed on products originating from the three countries that are entered into US commerce beginning Tuesday, February 4, 2025:

  • 25% tariffs on non-energy imports from Canada and on all imports from Mexico;
  • 10% tariffs on energy imports from Canada; and
  • 10% tariffs on imports of Chinese-origin goods.

These tariffs will apply on top of existing tariffs.  Most Mexican and Canadian origin goods are currently imported duty free under the US-Mexico-Canada (USMCA) free trade agreement, and these tariffs would apply to those USMCA qualifying goods.  The executive orders also include a retaliation clause, which authorizes the imposition of additional tariffs in response to any retaliatory measures imposed in response to the tariffs.  The White House also reported that no exclusions from the tariffs would be granted, and imports subject to these tariffs will not be eligible to be imported duty-free under the de minimis exemptions for low-value (less than $800) shipments.  The executive orders also direct that the tariffs cannot be refunded through duty drawback.

The executive orders provide narrow exemptions for articles that were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before February 1, 2025.

Mexican President Claudia Sheinbaum Pardo and Canadian Prime Minister Justin Trudeau have previously stated that they will respond to the imposition of the tariffs by taking retaliatory measures, including imposing tariffs on US imports into Mexico and Canada.  No such measures have been announced immediately following the reports that President Trump signed the executive orders imposing tariffs, though the situation remains highly fluid.

We have been advising clients in preparation for these tariffs for several months, and our Customs team of attorneys and practitioners in the US, Mexico Canada, China and in our global platform have been following these developments closely and are ready to advise clients on how these measures impact their supply chains and to help mitigate their impact.

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