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February 3rd - Date of the last update: February 13th
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Trump Tariffs for Canada, Mexico and China Move Forward

Date of update: February 13th, 2025 (Updates are highlighted for ease of identification)
On February 1, 2025, President Trump issued three new Executive Orders (EO) moving forward on new tariffs to be applied to imported goods from Canada (CA), Mexico (MX) and China (CN). This action was not a surprise as it has been a promise discussed frequently during the Trump campaign. The punitive tariffs will be 25% for CA and MX, and 10% for CN goods.
The EOs state that the tariffs will be applied with respect to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 am EST on Tuesday, February 4, 2025.
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CN Update:
 On February 7, 2025, President Trump released a new Executive Order (dated February 5, 2025) amending the Executive Order for the China tariffs with respect to de minimis shipments. The amendment makes duty free treatment of de minimis shipments (including postal) available again until notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue applicable. An updated Federal Register Notice was also published to incorporate this change. CBP issued subsequent CSMS messages (#64082249 and #64045612) providing additional instructions and guidance. Most notably, CBP will not refund duties for any shipments denied de minimis prior to ACE’s resumption of processing de minimis clearances for shipments containing products of China and Hong Kong on February 7, 2025.
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CA Update:
 Late day, on February 3, 2025, President Trump and Prime Minister Trudeau announced that as a result of negotiations, there would be an immediate pause on the tariffs for a 30 day period. This was based on concessions by CA to invest further in securing the northern border. As with MX, negotiations will continue to work toward a more permanent solution.
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MX Update:
At approximately 9:41 a.m. on February 3, 2025, President Trump posted on Truth Social that as a result of discussions with Mexico’s President Claudia Sheinbaum, he has agreed to immediately pause the anticipated tariffs for a one month period during which the US will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico to work toward a more permanent agreement.

Executive Orders overview

Three Executive Orders were issued on February 1, 2025, as follows:
  • Canada: Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border
  • Mexico: Imposing Duties to Address the Situation at Our Southern Border
  • China: Imposing Duties to Address the Synthetic Opioid Supply Chain in the People's Republic of China
The key elements of the EOs are for the most part, consistent across all three countries, apart from the actual tariff rates.
  • The tariffs will be applied with respect to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 am EST on Tuesday, February 4, 2025. A Federal Register Notice (FRN) will be issued with more details.
    • Exception: goods entered for consumption, or withdrawn from warehouse for consumption, after such time 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 12:01 a.m. eastern time on February 1, 2025, shall not be subject to such additional duty, only if the importer certifies to CBP as specified in the Federal Register notice. This certification process is expected to be issued as a separate FRN.
  • All goods will be subject to an additional ad valorem rate of duty dependent on the country of origin (25% for CA & MX, and 10% for CN).
    • It should be noted that there will be an exception for energy resources and product from CA, which will have an additional duty rate of 10%.
  • The Secretary of Homeland Security shall determine the modifications necessary to the Harmonized Tariff Schedule of the United States (HTSUS) and shall make such modifications to the HTSUS through notice in the Federal Register.
  • The rates of duty established by these orders are in addition to any other duties, fees, exactions, or charges applicable to such imported articles.
  • No drawback shall be available with respect to the duties imposed pursuant to this order.
  • Duty-free de minimis treatment under 19 U.S.C. 1321 shall not be available for the articles described in the FRN.
  • With respect to FTZs, articles that are products of Canada, except those that are eligible for admission under “domestic status” as defined in 19 CFR 146.43, which are subject to the duties imposed by this order and are admitted into a US FTZ on or after 12:01 a.m. eastern time on February 4, 2025, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41. Such articles will be subject upon entry for consumption to the rates of duty related to the classification under the applicable HTSUS subheading in effect at the time of admittance into the United States foreign trade zone.
  • Should the country retaliate against the United States in response to this action through import duties on United States exports or similar measures, the President may increase or expand in scope the duties imposed under this order to ensure the efficacy of this action.
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Update:
Federal Register Notices (FRN): (to be published 2/5/2025)
The tariffs are being implemented using the International Emergency Economic Powers Act ("IEEPA"). IEEPA is primarily used by claiming that the flow of illegal immigration, as well as illicit drugs (primarily fentanyl) into the US, is a national emergency. President Trump declared a national emergency regarding the threat to the US posed by the influx of illegal aliens and illicit in Proclamation 10886 of January 20, 2025 (Declaring a National Emergency at the Southern Border). He has expanded the scope of the national emergency declared in that Proclamation to cover the threat to the safety and security of Americans justifying this action.

Retaliatory actions

As stated in the EOs, should CA, MX or CN retaliate in response with similar measures, the US may increase or expand the scope of the duties being imposed. The EOs were immediately met with a response by those countries as follows, with CA taking the strongest lead.
Canada announced its response to the Trump tariffs, which included retaliatory tariffs on $30 billion of US goods imported into Canada. The tariffs (aka surtax) will be effective February, 4, 2025.
  • The list (identified as the 8-digit HS number level) includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper.
  • Canada intends to impose tariffs on an additional list of imported U.S. goods worth $125 billion. A full list of these goods will be available shortly for a 21-day public comment period prior to implementation, and includes products such as passenger vehicles and trucks, including electric vehicles, steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles, and recreational boats. Canada is also considering non-tariff measures with respect to critical minerals and energy procurement.
  • Additional details on the administration of these tariffs are available on the Canada Border Services Agency website: Customs Notices.
    • The surtax will apply to goods imported for commercial and personal purposes, even when exported from a country other than the U.S. into Canada.
    • The surtax applies to goods, including those that may be classified in the tariff items of Chapter 99 of the Schedule to Canada’s Customs Tariff – with the exception of goods that are temporarily imported for repair in Canada or re-imported into Canada after being exported for repair – even though they are entitled to the Most-Favoured-Nation zero customs duty rate under that Chapter.
    • The surtax does not apply to goods classified, or that should be classified in Chapter 98 of the Schedule to the Customs Tariff, other than goods of 9897.00.00, 9898.00.00 and 9899.00.00.
    • Canada’s Duties Relief and Duty Drawback Programs will be available for surtax paid or payable, subject to the provisions of the Canada-United States-Mexico Agreement (CUSMA).
Mexico initially stated it would take retaliatory measures, however following discussions with President Trump today, agreed to supply 10,000 Mexican soldiers on the Border separating Mexico and the United States. These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants to the US. It is likely we will see more specifics from these countries in the coming days.
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CN Update:
 China has indicated that it will proceed with initiating a WTO action and has taken additional measures as of February 4, 2025. Actions taken are as follows:
  • Imposition of retaliatory tariffs on targeted US goods. The new tariffs by China include a 15% tariff on US coal and LNG, and 10% for crude oil, agricultural machinery and a small number of trucks, as well as big-engine sedans. The tariffs are slated to go into effect on February 10, 2025, allowing a brief period for negotiations.
  • Initiation of an anti-monopoly investigation into Alphabet Inc’s Google.
  • Addition of US biotech company Illumina and PVC Corp (parent company to Tommy Hilfiger, Calvin Klein and addition brands) to the Unreliable Entities List.
  • Introduction of fresh export controls on a handful of rare metals, including tungsten, indium and molybdenum which will not require companies to apply for a license.

Additional tariffs?

The tariffs on CA, CN and MX as outlined above, are not the only tariff actions to be concerned about. President Trump has also indicated his intentions to impose possible tariffs on EU goods, and potentially on imports across a range of specific industry sectors, including computer chips, pharmaceuticals, steel, aluminum, copper, oil and gas. President Trump stated he was eyeing February 18, 2025 to impose oil and gas tariffs.
On February 10th and 11th, President Trump issued new proclamations imposing additional duties on imports of Steel and Aluminum. These are scheduled to go into effect on March 12, 2025. Please see our separate regulatory insight articles on this topic for further details.
BRIC countries are also a possible target should they move forward with efforts to establish an alternative currency from the U.S. Dollar for purposes of on-going trade.
Trump also signaled he still plans to pursue a baseline universal tariff for all imports.

How to prepare

Because this is such an unstable (and unpredictable) situation, and ongoing negotiations can result in changes to planned tariffs with little to no notice. The uncertainty surrounding these potential tariffs creates a pressing need for companies to reassess their supply chains, sourcing strategies, and overall trade compliance processes.
Areas to consider as you review your strategies could include:
  • FTAs and Tariff Preference Programs
  • Tariff Engineering
  • Origin Engineering
  • Exclusions (if available)
  • Duty Deferral Programs – Foreign Trade Zones
  • Change in procurement/sourcing patterns
  • Use of First Sale
To learn more about how the ONESOURCE Global Trade suite of tools and services can help businesses analyze potential impacts, explore alternative sourcing options, and optimize their trade operations to mitigate risks and capitalize on potential advantages, please contact your Account Manager or Customer Success Manager.