February 1, 2025.
We want to bring your attention to a major trade development that will take effect on Tuesday, February 4, 2025, at 12:01 AM ET. President Donald Trump has officially signed an executive order at his Mar-a-Lago club implementing new tariffs on imports from Mexico, Canada, and China under the International Emergency Economic Powers Act (IEEPA). These measures are part of an effort to curb the flow of drugs and illegal immigration into the United States.
The new tariffs are as follows:
- 25% tariff on all imports from Mexico and most goods from Canada
- 10% tariff on Canadian energy products (oil, gas, electricity)
- 10% additional tariff on all imports from China
- Closure of the de minimis loophole, eliminating tax exemptions for shipments under $800
This policy represents a significant shift in North American trade, reversing years of duty-free commerce under the United States-Mexico-Canada Agreement (USMCA) and further escalating trade tensions with China. These tariffs will have no exemptions, and their removal is contingent upon the cessation of illegal drugs and immigration, as per the administration’s announcement.
Potential Impact
- Price increases: Expect higher costs on a broad range of goods, including automobiles, electronics, fresh produce, fuel, and consumer products.
- Supply chain disruptions: The closure of the de minimis loophole may particularly impact e-commerce businesses importing from China (e.g., Shein and Temu).
- Retaliatory measures: Canada and Mexico have signaled possible counter-tariffs, which could further impact trade costs.
We are currently awaiting further guidance on the enforcement of these tariffs and will provide updates as more details emerge.
Next Steps
We strongly encourage our clients to review their supply chains and assess how these new tariffs may impact their operations. If you need assistance in understanding these changes or planning for potential cost adjustments, please do not hesitate to reach out to our team.
We will continue to monitor this evolving situation and keep you informed of any new developments.