The Trump administration implemented tariffs against Canada and Mexico effective March 4, 2025, arising from declared national emergencies at both the northern and southern U.S. borders pursuant to the International Economic Emergency Powers Act (IEEPA).
Implementation of Tariffs
On March 3, 2025, U.S. Customs and Border Protection (CBP) issued draft Federal Register notices (to be published March 6, 2025): (1) a Notice of Implementation of Additional Duties on Products of Canada Pursuant to the President’s Executive Order 14193, Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border; and (2) a Notice of Implementation of Additional Duties on Products of Mexico Pursuant to the President’s Executive Order 14194, Imposing Duties to Address the Situation At Our Southern Border, confirming the implementation of the following IEEPA tariffs, effective March 4, 2025:
- 10% ad valorem tariffs on energy products of Canada,
- 25% ad valorem tariffs on other products of Canada, and
- 25% ad valorem tariffs on products of Mexico.
The IEEPA tariffs are in addition to any other general duties, special duties including antidumping/countervailing duties (AD/CVD), Section 301, Section 232, or other taxes, fees, and charges.
Country of Origin: The country of origin will be determined by the criteria in 19 C.F.R Part 102 and the last place of substantial transformation. IEEPA tariffs will also apply to products of Canada and Mexico even if they qualify under the United States-Mexico-Canada Agreement (USMCA).
Customs Entries: Effective March 4, 2025, companies must comply with customs entry procedures for these goods using HTSUS codes 9903.01.01-.03 for products of Mexico and 9903.01.10-13 for products of Canada.
FTZs: All goods entering foreign trade zones (FTZs) on or after 12:01 am EST on March 4, 2025, must enter under “privileged foreign status” unless otherwise eligible to enter under “domestic status.”
Drawback: Duty drawback will not be available for products subject to these tariffs imposed under the IEEPA.
De Minimis:TheSection 321 de minimis exemption remains available for eligible articles.
For more information, see CBP messages at the Cargo Systems Messaging Service (CSMS) for Canada and Mexico.
Exclusions from Tariffs
The only articles expressly excluded from the ad valorem duties at this time include:
- postal, telegraphic, telephonic, or other personal communications, which do not involve a transfer of anything of value;
- donations, by persons subject to the jurisdiction of the United States, of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering;
- informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds; and
- any transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use.
HTSUS Chapter 98 “Special Classifications” will continue to apply to potentially exempt certain articles from tariffs except that updated valuation rules will apply. Companies may want to review Chapter 98 to determine potential eligibility.
Retaliatory Tariffs of Canada & Mexico
In response, Prime Minister Justin Trudeau of Canada announced retaliatory tariffs. The first tranche of retaliatory tariffs of roughly CA$33 billion went into effect today (see here). The second tranche of retaliatory tariffs of roughly CA$155 billion is scheduled to go into effect in 21 days (March 25).
President Claudia Sheinbaum of Mexico began her Tuesday press briefing with a statement criticizing the 25% tariffs. She announced that Mexican officials will be speaking with President Donald Trump on Thursday and warned that if the tariffs remained, Mexico would announce countermeasures, including retaliatory tariffs, on Sunday.
Possible Tariff Relief
U.S. Secretary of Commerce Howard Lutnick indicated that President Donald Trump may announce a compromise with Canada and Mexico on Wednesday, March 5, 2025. In an interview with Fox Business, Lutnick mentioned that both Canadian and Mexican officials had been in discussions with President Trump throughout the day, seeking to address U.S. concerns.