In an era marked by global unrest, regulatory complexities, and a shifting market landscape, companies must remain diligent in their trade compliance procedures and stay apprised of changes in the law.
TC Trade Alerts will serve as a central resource for identifying the policy changes, executive orders, and necessary information and context regarding government actions affecting international trade.
See below for more information on the last TC Trade Alerts. If you have any questions about how this affects your business, please don't hesitate to contact one of our attorneys.
Additional Resources
Trade Compliance Handbook | Checklists of Foreign Countries Subject to Sanctions | Our International Trade Practice
| TRUMP ADMINISTRATION TRADE ALERT – IMPORTS | |
| HEADLINE | Implementation of Additional Duties on Products from Mexico |
| DATE | 3 March 2025 |
| AGENCY | Department of Homeland Security, Customs and Border Protection (CBP) |
| STATUS | 25% duties implemented on all goods from Mexico (except donated items intended to relieve human suffering under 9903.01.02, informational items under 9903.01.03, and products for personal use included in accompanied baggage of persons arriving in the U.S.) |
| EFFECTIVE DATE | 4 March 2025, 12:01 a.m. Eastern Time |
| BACKGROUND | On February 1, 2025, President Trump issued an Executive Order
imposing 25% duties on all goods from Mexico. On February 3, 2025, Mexico negotiated a 30-day extension with President Trump until March 3. |
| DETAILS | CBP's Notice of modifications to the Harmonized Tariff
Schedule of the U.S. (HTSUS) to implement the increased duties on
products of Mexican origin was published for public inspection on
March 3, 2025. It is scheduled for official publication on March 6,
2025. The duties will be effective at 12:01 a.m. ET on March 4,
2025. " HTS 9903.01.01 imposes 25% duties on all products of Mexico. Pursuant to the Notice, a good is a "product of Mexico" if it is determined to be so pursuant to part 102 of Title 19, or if the good was last substantially transformed in Mexico. " The de minimis exemption for duty-free treatment is allowed to continue for goods imported from Mexico until the Secretary of Commerce notifies the President that adequate procedures are in place to handle those entries. " The Notice reiterates additional exceptions for certain personal and humanitarian shipments. " The additional duties do not apply for goods properly claimed under a provision of Chapter 98, except the additional duties apply to the value of repairs declared under 9802.00.40, 9802.00.50, and 9802.00.60. For 9802.00.80, the additional duties apply to the value of the article assembled abroad, less the cost of value of such products of the United States. It is possible that the Notice may be modified or revoked prior to the official publication, as was the case when the duties were first announced in February |
| BASIS | International Emergency Economic Powers Act (IEEPA), 50 U.S. Code § 1701 et seq.; the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA); section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483); and section 301 of title 3, United States Code. |
| HTS/ PRODUCTS |
Subheading 9903.01.01 will impose an additional 25% tariff to all goods of Mexico. |
| COUNTRY | Mexico |
| CITE | Unpublished Notice
– Scheduled to be published in the Federal
Register on March 6, 2025. Amendment to Duties to Address the Situation at our Southern Border – The White House Progress on the Situation at Our Southern Border – The White House |
Summary
President Trump issued three executive orders that "impose, consistent with law, ad valorem tariffs on articles that are products of" 25% on products of Mexico, 25% on products Canada (except energy products, which are at a lower 10% rate), and an additional 10% on products of China as set forth in each order, under IEEPA and other authorities. These duties are effective Tuesday, February 4, 2025. There is no drawback or duty-free de minimis relief available for these duties, and they will apply on top of other applicable programs.
Products Affected
The executive orders cover "all articles" that are the product of Mexico, Canada, and China, "as defined by the Federal Register notice." The Secretary of Homeland Security is tasked with determining and publishing "the modifications necessary to the Harmonized Tariff Schedule of the United States (HTSUS) in order to effectuate this order consistent with law." This notice has not been published yet. While it is anticipated that these E.O.s will cover all products from each nation, with the exception of Canadian energy products, there are significant questions to be resolved. For example, if a Chinese item was excluded from the Section 301 tariffs, will it be subject to the tariffs under the February 1 E.O.? Similarly, does the E.O. apply equally to goods that originate in Canada or Mexico under the United States-Mexico-Canada Agreement (USMCA) as it does to goods that are substantially transformed in Canada or Mexico, but do not qualify as originating under USMCA?
Canadian "energy or energy resources," which are subject to a 10% tariff instead of the 25% tariff applicable to other Canadian products, are defined by reference to section 8 of the president's order on January 20, 2025, Declaring a National Energy Emergency to include "crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3)."
Application in Relation to Other Duties
The rates of duty established in each order are defined to be in addition to any other duties, fees, exactions, or charges applicable to such imported articles.
No drawback program relief (19 CFR parts 190, 191) is available with respect to the duties imposed pursuant to these orders.
Duty-free de minimis treatment under 19 U.S.C. 1321 is not available for the articles affected by the tariff action.
For foreign trade zone products subject to each order, articles that are products of Canada, other than "domestic status" eligible products defined in 19 CFR 146.43, entered after the effective date must be admitted as "privileged foreign status" as defined in 19 CFR 146.41, and upon entry for consumption will be subject to the increased duties in effect at the time of admittance into the foreign trade zone.
There is no indication as to whether goods that are entered pursuant to one of the provisions of Chapter 98 of the HTSUS would be exempt from these duties.
Retaliation Clause
Each order contains a retaliation clause reserving the right to "increase or expand in scope" the tariffs imposed by each E.O., should the country retaliate by imposing additional tariffs on U.S. goods. Canada and Mexico have already announced tariff retaliations are planned, with Canada specifying 25% additional duties would be imposed on C$30 billion of U.S goods as of February 4, and an additional C$125 billion in goods in three weeks, according to Prime Minister Justin Trudeau's announcement February 1. He stated the list of products would include "American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes ... major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more" as well as some "non-tariff measures" related to critical minerals, energy procurement, and other unspecified partnerships. See Transcript of Trudeau's response to U.S. tariffs on Canada, Global News, Posted February 1, 2025, 10:21 pm, available at https://globalnews.ca/news/10993376/trudeau-trump-tariffs-us-canaaada/.
Products Excluded and/or Exclusion Process
No product exclusions or exclusion process were announced.
Removal of Duties
The Secretary of Homeland Security is charged with consulting with several other cabinet secretaries and the attorney general regarding the emergency situation and is required to "inform the President of any circumstances that, in the opinion of the Secretary of Homeland Security," indicate the government of the tariffed country has taken "adequate steps" to alleviate the emergency that gave rise to the order. If the president determines sufficient action to stem the crisis has occurred, the tariffs will be removed. What constitutes "adequate steps" to justify removal is not defined.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
