On February 1, 2025, President Trump issued three executive orders directing the United States to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025.
The tariffs are an additional 25% ad valorem rate of duty on imports from Canada and Mexico and 10% on imports from China. The tariffs will apply to all imports except Canadian energy resources exports, which will face a 10% tariff instead.
The tariffs apply to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time on February 4, 2025. Goods already in transit to the United States before to 12:01 a.m. on February 1, 2025 (the day Trump issued the executive orders) are exempt from the tariffs.
The executive orders also suspend access to the Section 321 customs de minimis entry process, subjecting shipments below US$800 (which are often e-commerce retail shipments) to the tariffs.
The tariffs will remain in effect indefinitely, until the president decides to remove them. Further tariff increases – by the United States and the target countries – are possible over the next few weeks. The orders state that the president may raise the tariffs further if Canada, Mexico, and China retaliate. All three countries have signaled their intention to retaliate.
Canada tariffs
- Tariff rate: The additional tariffs for imports from Canada will be 25% ad valorem. The new tariffs will apply in addition to any other duties, fees, exactions, and charges applicable to the covered imports. “Energy or energy resources” imported from Canada will be subject to a lower tariff rate of 10%, instead of the 25% tariff. However, the reprieve may be temporary. Trump has said he intends to increase tariffs on oil and gas in mid-February.
- Products covered: The president’s order does not include a full list of covered Harmonized Tariff Schedule of the United States (HTSUS) codes. The order’s references to the tariffs covering “all articles” suggests the 25% tariff would apply to all merchandise imported for consumption, other than “energy or energy resources.” “Energy or energy resources” is defined based on Trump’s January 20 National Energy Emergency Executive Order, which states that “the term ‘energy’ or ‘energy resources’ means 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.”5 The term “critical minerals” is further defined as any non-fuel mineral, element, substance, or material designated as critical by the Secretary of the Interior, who has published a comprehensive list.6 Full details of the covered HTSUS codes and the new HTSUS chapter 99 special tariff number will likely be included in a technical annex either when the government publishes the president’s order to the Federal Register or in a follow-up Federal Register notice by the Department of Homeland Security (DHS).
Mexico tariffs
- Tariff rate: The additional tariffs for imports from Mexico will be 25% ad valorem. The new tariffs will apply in addition to any other duties, fees, exactions, and charges applicable to the covered imports. Unlike Canada, there is no reduced tariff rate for energy or energy resources imported for Mexico.
- Products covered: The president’s order does not include a full list of covered HTSUS codes. The order’s references to the tariffs covering “all articles” suggests the tariffs would apply to all merchandise imported for consumption. Full details of the covered HTSUS codes and the new HTSUS chapter 99 special tariff number will likely be included in a technical annex either when the government publishes the president’s declaration to the Federal Register or in a follow-up Federal Register notice by DHS.
China tariffs
- Tariff rate: The additional tariffs for imports from China will be 10% ad valorem. The new tariffs will apply in addition to any other duties, fees, exactions, and charges applicable to the covered imports.
- Products covered: The president’s order does not include a full list of covered HTSUS codes. The order’s references to the tariffs covering “all articles” suggests the tariffs would apply to all merchandise imported for consumption. Full details of the covered HTSUS codes and the new HTSUS chapter 99 special tariff number will likely be included in a technical annex either when the government publishes the president’s declaration to the Federal Register or in a follow-up Federal Register notice by DHS.
- Application to Hong Kong and Macau: The additional tariffs appear to apply only to products classified as originating from the People’s Republic of China (ISO Country Code CN). There is no indication in the executive order that the duties would apply to goods that originate in Hong Kong (HK) or Macau (MO).
To put the tariffs in place, Trump in his executive action declared a national economic emergency, invoking the International Emergency Economic Powers Act, known as “IEEPA,” which authorizes a president to unilaterally manage imports during a national emergency. The tariffs are set to go into effect Tuesday at 12:01 am ET.
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“Today, I have implemented a 25% Tariff on Imports from Mexico and Canada (10% on Canadian Energy), and a 10% additional Tariff on China,” Trump said in a message posted to Truth Social on Saturday. He said he used the IEEPA “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl. We need to protect Americans, and it is my duty as President to ensure the safety of all.”
Hours after Trump’s action, Trudeau announced retaliatory 25% tariffs on US goods, that will be “far-reaching and include everyday items,” making good on his promise that Canada would retaliate forcefully and swiftly if the United States imposed levies. The country’s trade representatives met with Trump administration officials as recently as Friday in an attempt to stave off the tariffs.
“The actions taken today by the White House split us apart instead of bringing us together.” “Tonight, I am announcing Canada will be responding to the US trade action with 25% trade tariffs against $155 billion worth of American goods,” the Canadian leader said in a news conference Saturday night. “This will include immediate tariffs on $30 billion worth of goods as of Tuesday, followed by further tariffs on $125 billion of American products in 21 days’ time, to allow Canadian companies and supply chains to seek to find alternatives.”
Affected items will include American alcohol, produce, clothing, shoes, household appliances, furniture, materials such as lumber, and “much more,” Trudeau said.
Mexico’s Sheinbaum also struck a defiant tone Saturday.
“When we negotiate with other nations, when we talk with other nations, [it is] always with our heads held high, never bowing our heads,” Sheinbaum said, speaking in Chicoloapan de Juárez, east of the country’s capital.
“I instruct the Secretary of Economy to implement plan B that we have been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests,” Sheinbaum said later in a post on X. It is not clear exactly what the retaliatory tariffs involve.
A White House fact sheet on the tariffs said Mexican drug trafficking organizations have an “intolerable alliance” with the country’s government, accusing the government of providing a “safe haven” to cartels. Sheinbaum strongly denied “having alliances with criminal organizations,” calling the accusation “slander.”
“We categorically reject the White House’s slander that the Mexican government has alliances with criminal organizations, as well as any intention of meddling in our territory,” Mexican President Claudia Sheinbaum wrote in a post on X while saying she had instructed her economy secretary to implement a response that includes retaliatory tariffs and other measures in defense of Mexico’s interests.
“If the United States government and its agencies wanted to address the serious fentanyl consumption in their country, they could fight the sale of drugs on the streets of their major cities, which they don’t do and the laundering of money that this illegal activity generates that has done so much harm to its population.”
Meanwhile,
China’s Ministry of Foreign Affairs said the country’s government “firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests.”
China began regulating fentanyl-related drugs as a class of controlled substances in 2019 and conducted “counternarcotics cooperation with the U.S.,” the ministry said, calling on the U.S. government to correct what it considers wrongful actions.
The Ministry of Commerce in China said it would file a lawsuit with the World Trade Organization for the “wrongful practices of the U.S.” and take measures to safeguard its rights and interests.
The tariffs will go into effect on Tuesday, setting up a showdown in North America that could potentially sabotage economic growth.
