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 Alert. 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 | U.S. Customs and Border Protection Implement Additional Duties on Products of the People's Republic of China; U.S. and Canada/Mexico Agree to One-Month Pause on Tariffs |
| DATE | February 3, 2025, 5:30 PM EST |
| AGENCY | Department of Homeland Security, Customs and Border Protection (CBP); Trump Administration |
| STATUS | China – Duties to be imposed on goods
entered or withdrawn from warehouse on February 4, 2025, unless one
proves that the goods were shipped prior to February 1, 2025. 2025-02293.pdf Canada – Suspended for 30 Days – No official notice, yet. Mexico – Suspended for 30 Days – Progress on the Situation At Our Southern Border – The White House |
| EFFECTIVE DATE | China – February 3, 2025, 12:01 a.m.
Eastern Time Canada, Mexico – March 3, 2025 (tentative) |
| BACKGROUND AND DETAILS | On February 1, 2025, President Trump issued three Executive
Orders requiring the imposition of 10% duties on all goods from
China, 10% duties on Canadian petroleum products, and 25% duties on
all other goods from Canada and all goods from Mexico. On February 3, 2025, Mexico negotiated an extension with President Trump, DHS posted Federal Register Notices regarding the new tariffs on goods from China and Canada, and Canada negotiated an extension with President Trump. China CBP published modifications to the Harmonized Tariff Schedule of the U.S. (HTSUS) duties to implement the increased duties on products of Chinese origin. In addition to reiterating requirements of the Executive Orders implementing the tariffs, the notices clarify that: — goods entered or withdrawn for consumption, after 12:01 a.m. Eastern Standard Time on February 4, 2025, that were loaded or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. Eastern Standard Time on February 1, 2025, are not subject to additional duties if the importer certifies declares new HTSUS heading 9903.01.23 (China) as described in the annex; — the additional duties apply to the value of Chinese processing of materials imported pursuant to 9802.00.40, 9802.00.50, 9802.00.60, and the value of the assembled article for 9802.00.80, but otherwise do not apply to goods entered pursuant to a provision of Chapter 98 HTSUS; Canada and Mexico — Trump and the leaders of Canada and Mexico announced on social media an agreement to a "one-month" pause on implementation of the February 1 duties imposed on their respective nations. — CBP issued its proposed modifications to the HTS implementing tariffs on goods from Canada prior to the delay – 2025-02291.pdf. This will likely be rescinded. |
| BASIS | 1 February 2025 Executive orders and authorities incorporated by reference. |
| HTS/ PRODUCTS |
China — Subheading 9903.01.20 will apply an additional 10% tariff to goods of Chinese or Hong Kong origin as defined in the Annex. |
| COUNTRY | Canada, China, Mexico |
| CITE | China – Federal Register Notice. Canada – Federal Register Notice (likely to be rescinded). Official notice of extension was not available at the time of this publication. Mexico – Progress on the Situation At Our Southern Border – The White House |
| TRUMP ADMINISTRATION TRADE ALERT – IMPORTS | |
| HEADLINE | Trump imposes additional 10% tariffs on all products originating in China and 25% tariffs on all products originating in Mexico and Canada (with a lower 10% on Canadian "energy products") |
| DATE | February 1, 2025 |
| AGENCY | Presidential Action |
| STATUS | Canada – Executive Order Imposing Duties to Address the Flow of Illicit
Drugs Across our Northern Border Mexico – Executive Order – Imposing Duties to Address the Situation at Our Southern Border China – Executive Order – Imposing Duties to Address the Synthetic Opioid Supply Chain in the People's Republic of China |
| EFFECTIVE DATE | 12:01 a.m. Eastern Time, February 4, 2025 |
| DETAILS | President Trump issued three executive orders imposing: 1. Additional 25% tariffs on all products of Mexico 2. Additional 25% tariffs on all products of Canada, except "energy products" from Canada, which will have a 10% tariff 3. Additional 10% tariff on all products of Chinese products. The duties imposed by the E.O. are not available for duty drawback. The E.O. also prohibits the use of Section 321 for the "products of" Mexico, Canada, and China, as that term will be defined in the Federal Register Notice. The tariffs imposed by the E.O. are in addition to ordinary duties and any other tariff programs (e.g., Section 301 China tariffs, ADD/CVD, Section 232) that may apply. No exclusion process was provided for in the executive actions. A retaliation clause threatens additional tariffs if a country imposes tariffs on U.S. goods. |
| BASIS | International Emergency Economic Powers Act (IEEPA), 50 U.S. Code § 1701 et seq. citing a declaration of national emergency in response to the "extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl"; 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 |
Nearly all. All products of Mexico and Canada "as defined by the Federal Register" will be subject to a 25%, except "energy products" from Canada, which will have a 10% tariff. Chinese products will be subject to an additional 10% tariff. The Federal Register notice that defines the products has yet to be published. |
| COUNTRY | Mexico, Canada, and China |
| CITE | https://www.whitehouse.gov/presidential-actions/ |
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.
