President Trump Announces Tariffs on Imports from Canada, Mexico, and China

At a glance

• The main takeaway: A new Presidential Proclamation has levied additional tariffs on imports from Canada, Mexico, and China.
• Impact on your business: These additional tariffs could bring higher costs and potential supply chain disruptions.
• Next steps: Businesses anticipating impacts from tariffs can schedule a consultation with Aprio’s Customs and Tariffs advisors to discuss potential mitigating strategies.

The full story:

On February 1, 2025, the new administration issued a Presidential Proclamation for additional tariffs on imports from Canada, Mexico, and China, citing an extraordinary national emergency under the International Emergency Economic Powers Act (IEEPA). The new tariffs include:

• 25% additional duty on imports from Canada (except for energy resources – 10%)
• 25% additional duty on imports from Mexico
• 10% additional duty on imports from China

As early as February 4, 2025, these tariffs will apply to products originating from these countries, in addition to all existing duties and tariffs, such as Section 301 tariffs on Chinese goods and Section 232 tariffs on steel and aluminum. The administration’s stated reason for the tariffs is that the flow of illegal narcotics, particularly fentanyl, through these countries poses a direct threat to U.S. national security and public health.

Understanding IEEPA and Presidential Authority

The IEEPA, enacted in 1977, grants the U.S. President broad powers to regulate economic transactions in response to an “unusual and extraordinary” national emergency that threatens the country. Under IEEPA, the President can impose trade restrictions, block financial transactions, freeze assets, or restrict foreign investments and technology transfers.

Although IEEPA has historically been used to address threats such as terrorism, cyber threats, and foreign interference, this marks the first time it has been invoked to impose tariffs. The administration justifies these tariffs under IEEPA by citing illegal immigration and fentanyl trafficking as national emergencies. It relies on the administration’s claims that China has failed to curb precursor chemical exports, that Mexico is harboring drug cartels, and that Canada’s fentanyl production is increasing.

Business Implications and Possible Next Steps

The administration has signaled that further measures may be considered, including additional tariffs and trade restrictions targeting countries deemed responsible for exacerbating the fentanyl crisis and illegal immigration. Canada has already announced retaliatory tariffs of 25% on $155 billion worth of U.S. goods, signaling a likely escalation in trade tensions.

As of now, relevant government agencies have not issued official guidelines on administering the related import entry process or potential exemption processes for certain goods. The proclamation states that drawback claims are not permitted on these duties, and de minimis treatment under 19 U.S.C. 1321 does not apply.

While further guidance is expected through Federal Register Notices from the appropriate agencies, consulting with a professional advisory service can help companies navigate these evolving requirements.

The bottom line

Businesses affected by these tariffs should prepare for increased costs and potential supply chain disruptions. Industry groups and trade partners are expected to challenge the legality and economic impact of these measures.

Aprio’s experienced Customs and Tariffs Team can assist with assessing your current import structures, reviewing Harmonized System (HS) codes, customs valuation, and country of origin, preparing and filing exclusion requests or comments, exploring duty deferral programs, and identifying other potential strategies. Our services support accuracy and compliance, helping to minimize the financial impact of the new tariffs on your business operations.

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