On March 3, 2025, the Trump administration made clear its intention to move forward with implementing tariffs on Canada and Mexico on March 4. The tariffs are an additional 25% on all imports from Canada and Mexico (except for Canadian energy resources and minerals, which will face a 10% tariff instead) and were originally scheduled to enter into effect on February 4. President Trump also issued a new Executive Order on March 3 to increase the 10% tariff on all imports from China to 20% on March 4.
The Canada tariffs
The additional tariff for imports from Canada will be 25% for most products, with a 10% rate for "energy or energy resources."[1]
The Trump administration has not provided a comprehensive list of HTS codes that would qualify as "energy or energy resources," and the definition's exact scope is unknown. The Executive Order defines "energy or energy resources" 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."[2]
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 list of specific minerals, but not HTS codes.[3]
The new tariffs will apply in addition to any other duties, fees, exactions, and charges applicable to the covered imports. The tariffs apply to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time, March 4, 2025.
The Mexico tariffs
The additional tariff for imports from Mexico will be 25% on all imports.[4]
The new tariffs will apply in addition to any other duties, fees, exactions, and charges applicable to the covered imports. The tariffs apply to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time, March 4, 2025.
The Mexico and Canada tariff orders are identical, except that the Mexico tariff order does not include a reduced tariff rate for "energy or energy resources" imports. Energy and energy resources imports from Mexico are subject to the full 25% tariff rate.
The China tariff increase
On March 3, President Trump issued an amendment to the Executive Order that imposed a 10% tariff on all imports from China (and Hong Kong), changing the tariff rate to 20%.[5]
The tariff increase applies to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time, March 4, 2025.
Status of de minimis entry
Imports from Canada, Mexico, and China that qualify for de minimis entry are temporarily exempt from the new tariffs.
The original tariff orders had suspended access to the Section 321 customs de minimis entry process. Prohibiting the covered low-value imports from de minimis entry would subject them to the applicable tariff, to any other applicable tariffs (including the existing Section 301 and Section 232 tariffs), and to more costly formal entry processes.
On February 7, the White House acknowledged the challenges of suddenly ending de minimis entry, issuing an amendment to the original China tariff order that suspended the de minimis prohibition until the Secretary of Commerce sends notification to the president that "adequate systems are in place to fully and expediently process and collect tariff revenue […] for covered articles otherwise eligible for de minimis treatment."[6]
On March 2, President Trump issued amendments to the Canada and Mexico tariff orders to suspend those orders' de minimis entry bans, mirroring the amendment to the China tariff order. The Department of Commerce has not commented on when it may authorize the imposition of the de minimis entry suspension.
Other aspects of the tariff orders
The three tariff orders are written similarly, rely on the same legal basis, and apply the same technical measures, summarized below:
Required exclusions for certain personal, travel, charity, and media products: The orders state that the tariffs will exclude any merchandise encompassed by 50 U.S.C. § 1702(b).[7] The provision prohibits IEEPA-based actions from regulating or prohibiting, directly or indirectly, (1) personal communications, (2) donated articles, (3) informational materials, and (4) transactions ordinarily incidental to travel. The CBP guidance requires importers of excluded products to file special HTSUS chapter 99 codes to claim the exceptions. The government has not provided guidance that explains what products or HTSUS codes would qualify under these exclusions.
Prohibiting use of duty drawback: The orders state that "no drawback shall be available with respect to the duties imposed pursuant to this order."
Allowing use of temporary importation under bond (TIB): The tariffs do not apply to goods for which entry is properly claimed under a TIB provision of chapter 98, though in some cases tariffs will apply to certain foreign shares of a product's value. The CBP guidance provides details for treatment of each chapter 98 code.
US Foreign Trade Zone implications: The orders state that goods subject to the additional tariffs and admitted into a US foreign trade zone (FTZ) on or after 12:01 a.m. Eastern Standard Time on February 4, 2025 must enter in Privileged Foreign Status. These products would retain the duty even if processed into a different good in the FTZ.
Applies to products covered by temporary duty exemptions: The CBP guidance states that products that are otherwise eligible for temporary tariff exemptions or reductions under subchapter II to HTSUS chapter 99 (e.g., the Miscellaneous Tariff Bill) are also subject to the tariff.
No exclusion application process (but potential for later establishment): Unlike tariff actions during President Trump's first term, the new tariff orders include no provisions allowing importers to apply for product exclusions. Based on the implementation authorities the orders delegate to the Department of Homeland Security (DHS), it may be possible that the government will decide to introduce an exclusions process in the future. That said, Trump administration officials have said they do not intend to allow exclusions at this time.
Reliance on IEEPA: President Trump is using the International Emergency Economic Powers Act (IEEPA) as the basis for the tariff orders. Though no US president has ever used IEEPA to impose tariffs, policy advisors close to Trump have argued the law's extensive authorities could allow the president to rapidly implement tariffs with less need for investigations or oversight. With few procedural limits around the use of IEEPA, Trump can escalate conflicts very suddenly, as he did here.
Expect retaliation and further tariff increases
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.
Executive Order 14193 of February 1, 2025: "Imposing Duties To Address the Flow of Illicit Drugs Across Our Northern Border," 90 FR 9113; as amended by Executive Order 14197 of February 3, 2025: "Progress on the Situation at Our Northern Border," 90 FR 9183; and Executive Order of March 2, 2025: "Amendment to Duties to Address the Flow of Illicit Drugs across our Northern Border." See also, the implementing guidance published by CBP at "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," advance copy of the Federal Register notice; and CSMS # 64297449 - GUIDANCE: Additional Duties on Imports from Canada.
Executive Order 14156 of January 20, 2025, "Declaring a National Energy Emergency," 90 FR 8433.
"2022 Final List of Critical Minerals," 87 FR 10381 (February 24, 2022).
Executive Order 14194 of February 1, 2025: "Imposing Duties To Address the Situation at Our Southern Border," 90 FR 9117; as amended by Executive Order 14198 of February 3, 2025: "Progress on the Situation at Our Southern Border," 90 FR 9185; and Executive Order of March 2, 2025: "Amendment to Duties to Address the Situation at our Southern Border." See also, the implementing guidance published by CBP at "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," advance copy of the Federal Register notice; and CSMS # 64297292 - GUIDANCE: Additional Duties on Imports from Mexico.
Executive Order of March 3, 2025: "Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People's Republic of China." See also, updated implementing guidance from CBP at "Further Amended Notice of Implementation of Additional Duties on Products of the People's Republic of China Pursuant to the President's Executive Order 14195, Imposing Duties to Address the Synthetic Opioid Supply Chain in the People's Republic of China," advance copy of the Federal Register notice; and CSMS # 64299816 - UPDATE – Additional Duties on Imports from China and Hong Kong.
Executive Order 14200 of February 5, 2025: "Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People's Republic of China," 90 FR 9277 (issued on February 7, the order was later backdated to February 5).
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