The Unfolding Tariff Drama (and Some Things You Can Do)

As of this moment, the U.S. has announced a one-month delay for new tariffs on imports from Canada and Mexico. These tariffs will now take effect on March 4, 2025. However, tariffs on China remain on schedule for February 4, 2025. Here is a breakdown of this rapidly-changing story and what you can do about it: 

Why the Delay?

The postponement follows agreements between the U.S., Canada, and Mexico to enhance border security and combat drug trafficking. Mexico has committed to deploying 10,000 National Guard troops to its northern border while Canada has pledged to strengthen measures against fentanyl smuggling and increase enforcement efforts. With these agreements in place, the U.S. has delayed the tariffs on their countries until March 4. 

What Goods are Affected? 


Effective today, February 4, 2025, China will incur a 10% tariff on all products. Effective on March 4, 2025, Canada and Mexico will incur a 25% tariff on all goods that originate in their countries. These tariffs will apply to all products from these countries with final details expected soon. Furthermore, Canada will receive a 10% tariff on Canadian energy which covers crude oil, natural gas, uranium, coal, biofuels, and critical minerals. These tariffs are in addition to existing duties and fees.There are some limited exceptions to these tariffs. Notably, humanitarian donations and informational materials will not be affected. 


Note: If you have any goods that were loaded onto a vessel or in final transit before Feb. 1 at 12:01 a.m. ET it is possible they can avoid tariffs if properly certified with the U.S. Customs and Border Protection.


Retaliation Already Underway

In response to these tariffs, both Canada and Mexico have promised to retaliate in kind. Canada has announced a 25% tariff on $155 billion in U.S. goods, starting with $30 billion in targeted products. This includes products such as orange juice, appliances, apparel, footwear, and more with additional products expected to follow. While Mexico has yet to outline their countermeasures as of the publishing of this blog, we expect to hear their countermeasurers soon. 

Additional Impacts 


If or when these changes are implemented, de minimis (Section 321) which we covered extensively in our June 2024 blog  and October 2024 blogs will no longer be available for products from China, Canada, or Mexico.  As for any affected products entering Foreign Trade Zones (FTZs), they must enter under privileged foreign status, meaning they will be subject to applicable duties upon withdrawal. Finally, Drawback refunds will not be permitted for these tariffs. 

What Can You Do?

While the landscape is changing considerably - and quickly - there are a few things you can do to ensure your organization remains successful. Our team recommends evaluating your supply chain and optimizing landed costs. Here are a few tips: 

  • Ensure you're using the most favorable, legally allowed customs valuation method.

  • Look into the First Sale Rule for customs valuation of U.S. imports which could reduce duty exposure.

  • Review your buying agency fees which may be deductible from your dutiable value.

  • Analyze your duty engineering: small product modifications could place your goods under a lower duty rate. 

    • And If you've already implemented duty engineering, have you filed post-summary corrections or protests to recoup overpaid duties?

Our team continues to stay on top of these changes. If at any time you need support, or would like to discuss your options, we are here to help. Contact us today. 

David Kelley