Insights

Beginning just after midnight on March 4, 2025, the United States implemented a 25% tariff on imports from Canada and Mexico (except Canadian “energy resources,” which are subject to a 10% tariff), and increased tariffs on China from 10% to 20%. These tariffs are implemented under the International Emergency Economic Powers Act (IEEPA) pursuant to national emergencies declared by President Trump related to the influx of illegal immigrants and drugs, particularly fentanyl, into the United States. For additional background on the initial actions, please see our previous trade alert, Tariffs on Mexico and Canada Delayed; China Retaliates Against 10% Tariff.

Tariff Breakdown

Canada

A 25% tariff applies to “articles that are products of Canada,” except for “energy and energy resources that are products of Canada,” which are subject to a lower tariff of 10%. For the purposes of the 10% tariff, the United States has defined energy and energy resources 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.” U.S. Customs and Border Protection (CBP) provides additional details on the tariffs, including relevant Harmonized Tariff Schedule (HTS) codes for declaring articles subject to the tariffs, in a Federal Register notice (unpublished). Pursuant to an Amendment to the Executive Order establishing the tariffs, duty-free de minimis treatment is still available for otherwise eligible Canadian articles subject to the tariffs, but duty-free de minimis treatment will not be available “upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expeditiously process and collect tariff revenue . . . for covered articles otherwise eligible for de minimis treatment.”

Mexico

A 25% tariff applies to “articles that are products of Mexico.” Unlike the Canadian tariffs, there is no separate tariff amount for specified energy or other products from Mexico. Additional information about the tariffs on Mexican articles, including relevant HTS codes to declare, are found in a separate Federal Register notice (unpublished). Articles subject to Mexican tariffs are likewise eligible for duty-free de minimis treatment until the Department of Commerce creates adequate systems to collect tariff revenue on such de minimis entries.

China

“Articles that are products of the People’s Republic of China,” which include products from Hong Kong, have been subject to a 10% tariff since February 4, 2025. Beginning March 4, this tariff increased to 20%. The 20% tariff is in addition to any Section 301 tariffs implemented during the first Trump administration or the Biden administration. Therefore, certain products from China will be subject to 45% tariffs in addition to normal duty rates. Further details on the tariff increase on Chinese products is available in the relevant unpublished Federal Register notice.

Retaliation

Canada

Canada announced the following countermeasures against the United States:

• 25% tariffs, effective March 4, on a list of U.S. goods worth $30 billion, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products;
• 25% tariffs on an additional $125 billion worth of U.S. goods from another list currently subject to comment, which includes  “if the current U.S. tariffs are maintained.” This second list includes products such as “electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks, and buses.”

Additionally, the Canadian province of Ontario has announced its own retaliation against the U.S. tariffs, including the cancellation of $100 million contract with Elon Musk’s Starlink satellite communications company and a potential 25% surcharge on electricity from the province flowing into northern states in the United States.

China

China has also announced retaliatory measures against the United States, including:

• Tariffs of 10% to 15%, effective March 10, on various U.S. agricultural products, including chicken, pork, soy, and beef.
• The addition of 10 U.S. companies to China’s “Unreliable Entity” list. This listing can lead to prohibitions on import and export activity in China and a ban on further investment in China.
• The addition of 15 U.S. companies to China’s export control list, including Leidos Holdings and General Dynamics Land Systems. Chinese companies are prohibited from exporting dual-use items to companies on China’s export control list.

Mexico

Unlike Canada and China, Mexico has not yet published specific retaliatory measures. Instead, Mexican President Claudia Sheinbaum has stated that Mexico will announce countermeasures on Sunday, March 9.

Other Tariff Actions

Although this is the Trump administration’s largest tariff action to date, there are other tariff actions that may still become effective in the coming weeks and months and investigations that may lead to tariff actions, including:

• Reimposition of 25% tariff on steel imports and increase of aluminum tariff to 25%, applicable to all countries, effective March 12;
• “Reciprocal tariffs” on all countries, effective April 2;
• Commencement of a Section 232 of the Trade Expansion Act of 1962 investigation into the national security impact of copper imports, which could lead to future tariffs on these items;
• Initiation of a Section 232 investigation into the national security impacts of timber, lumber, and their derivative products, which could lead to future tariffs on these items; and
• Potential renewal of Section 301 of the Trade Act of 1974 investigations into digital service taxes of France, Austria, Italy, Spain, Turkey, and the United Kingdom, which could lead to tariffs against these countries.

If you have any questions about the tariffs on Canadian, Mexican, and Chinese goods, or about the multiple tariff actions and investigations referenced above and how these developments impact your imports, please do not hesitate to reach out to the team at Torres Trade Law.