As of March 4, 2025, all imports from Mexico and Canada are now subject to 25% tariffs (with the exception of Canadian energy imports subject to 10% import duties), and the 10% tariff initially imposed on Chinese imports in February doubling to 20%. This Alert discusses the new tariffs imposed on Canada and Mexico and the additional 10% tariffs imposed on China (in addition to the 10% tariffs imposed in early February).

As background, on February 1, 2025, the Trump Administration issued three executive orders imposing significant tariffs at the rate of 25% on all imports from Canada and Mexico, and on all imports from China (and Hong Kong) at the rate of 10%, citing national security concerns related to unlawful migration and fentanyl flows. The initial effective date was February 4, 2025, but was postponed until March 4, 2025, after Canada and Mexico reached a temporary truce with the United States. China’s tariffs went into effect on February 4, 2025.

As of March 4, 2025, the 25% ad valorem tariff is imposed on all imports that are the product of Canada and Mexico and the 10% + 10% tariff is imposed on all imports that are the product of China and Hong Kong. Notably, Canadian energy or energy resources, currently defined as 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, are subject to a lower 10% ad valorem tariff but no specific identified Harmonized Tariff Schedule (HTSUS) have currently been provided for these energy sector products, however, this may be a temporary measure as President Trump promised to increase tariffs on oil and gas.¹ The new tariffs will be reflected and are in addition to any other duties. The tariffs will remain in effect indefinitely, until the President deems the national emergency to be alleviated. China implemented retaliatory measures in response to the increased tariffs and Canada, and Mexico have proclaimed their intention to retaliate as well.² 

Tariff changes are being enacted through a combination of notices in the Federal Register (FR) and regulatory amendments to the Code of Federal Regulations (CFR).³ The U.S. Customs and Border Protection (CBP) will provide detailed technical guidance on how to implement these tariffs when importing merchandise subject to these tariffs.

Limited Exceptions and Exclusions

As announced, the executive orders do not provide for any mechanism for exceptions or exclusions. 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 on March 4, 2025. There is a limited carve out for goods “loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. eastern time on February 1, 2025.”⁴

Further, the tariffs are imposed on all goods except for merchandise excluded under 50 U.S.C. § 1702(b), namely (1) personal communications, (2) donated articles, (3) informational materials, and (4) transactions ordinarily incident to travel.

For now, goods imported from Canada and Mexico will still benefit from duty-free treatment under the Section 321 de minimis entry process (for shipments valued at less than $800), and China shipments remain eligible for de minimis entry treatment under Section 321. However, de minimis entry for Canada, Mexico, and China are expected to be removed once the government is able to effect proper implementation of the de minimis removal. Duty drawback will not be available for these tariffs under IEEPA paid on goods imported from Canada, Mexico and China. These measures are certain to be met with swift responses from the affected nations as detailed below. 

Canada

In February, Canadian Prime Minister Justin Trudeau announced retaliatory measures, including a 25% tariff on USD $105 billion worth of U.S. goods imported into Canada. These measures are formalized in the United States Surtax Order (2025), issued under subsection 53(2) and paragraph 79(a) of the Customs Tariff. 

The initial set of tariffs, effective February 4, 2025, targets products such as:

• orange juice, peanut butter, wine, spirits, beer, coffee;
• appliances, apparel, footwear;
• motorcycles, cosmetics, and pulp and paper;
• 1,256 HS codes identified as subject to the surtax;

representing an initial tranche of USD $20.3 billion of the announced USD $105 billion. The complete list of products included in the immediate term Canadian tariffs may be found online: https://www.canada.ca/en/department-finance/news/2025/02/list-of-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-february-4-2025.html . A second set of tariffs, which will be implemented after a 21-day comment period, will include:

• Passenger vehicles and trucks (including electric vehicles);
• Steel and aluminum products;
• Certain fruits and vegetables;
• Aerospace products, beef, pork, dairy;
• Trucks, buses, recreational vehicles, and boats;

in order to give Canadian business an opportunity to arrange for alternative sourcing. Given the 21-day comment period, the Canadian government has not yet published a list of goods that will be subject to the next set of tariffs. The United States Surtax Order (2025) defines U.S.-origin goods per the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.

In addition to the federal response, several Canadian provinces have announced actions such as limiting procurement from U.S. entities, canceling existing contracts and rejecting bids from U.S. companies, doubling tolls for U.S. commercial vehicles entering at Cobequid Pass, and removing U.S. alcohol from provincially controlled liquor stores.

Impacted parties can seek a remission order from the Department of Finance to exclude specific tariffs.

Mexico

In response to Trump’s February tariffs announcement, Mexican President Claudia Sheinbaum reportedly said that her government is ready to respond in kind and instructed the Secretary of Economy to implement the “Plan B” that will include tariff and non-tariff measures. While specific targets have not been detailed, Mexico is expected to focus on precision strikes against U.S. products, potentially employing a carousel retaliation strategy that periodically rotates the U.S. products subject to tariffs. In 2018, Mexico imposed tariffs on steel, pork, cheese, apples, and bourbon in response to U.S. steel tariffs, indicating possible sectors for future action. In response to the most recent announcements, Mexican authorities continue to indicate that they will respond in kind to the U.S. tariffs by implementing “Plan B,” which includes both tariff and non-tariff measures.

China

Following the February 4, 2025, imposition of 10% tariffs on Chinese imports, the U.S. has announced an additional 10% tariff on China. In a recent Oval Office briefing, President Trump cited insufficient progress on curbing fentanyl flows into the U.S.—despite largely resolved migration issues—as the key reason for increasing tariffs, with similar measures on Canada and Mexico set to take effect on March 4, 2025.

In response, Beijing has implemented a broad package of retaliatory measures including tightened export controls on key metal products and technologies, a 15% tax on certain coal and natural gas, and a 10% tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks, effective February 10, 2025. Additionally, China reportedly announced tariffs of up to 15% on a wide array of U.S. farm exports as follows:

• 10% tariffs on sorghum, soybeans, pork, beef, seafood, fruit, vegetables and dairy products;
• 15% tariffs on chicken, wheat, corn and cotton.

Reports indicate that China has also launched an antitrust probe into Google, placed two American firms⁵ on an unreliable entity list that could restrict their investments in China, and opened public consultation on new regulations aimed at further limiting U.S. access to its rare earth industry. 

Economic Implications and Practical Considerations

These tariffs may increase consumer prices in the United States as costs are passed on to buyers, affecting various sectors, including agriculture, electronics, and automobiles marking an escalation in trade tensions. In anticipation of increased U.S. tariffs and enforcement actions by Customs, as well as the retaliatory responses from Canada, Mexico and China, businesses should review existing agreements and supply chain logistics including:

• Review of the current supply chain, exploring opportunities of sourcing from countries currently not subject to tariff increases;
• Rerouting (i.e. drop-shipping) shipments when country of origin is not Canada, Mexico or China;
• Explore use of Bonded Warehouse storage, Foreign Trade Zones and other potential duty reduction strategies to mitigate timelines for paying duties during what may continue to be fluctuating changes. Importantly, Drawback is not permitted.
• Review HTS classifications and country or origin for all product inputs and finished products throughout the supply/manufacturing process to potentially minimize tariff impact.
• Review product valuation, including opportunities for First Sale valuation when transactions are multi-tiered. Review paid commissions and other services and fees, that may be legally excluded to reduce duties.
• Amend contractual agreements and terms and conditions to include clauses mitigating tariff increases. Please note that reliance on force majeure clauses should be reconsidered, as many jurisdictions refuse to hold that foreseeable tariff impositions and economic downturn constitute force majeure clauses unless specifically referenced by the parties.

Because these changes are ongoing, we will continue to disseminate updated Alerts periodically for our clients on the relevant changes. For guidance tailored to your business needs, please contact Dentons Cohen & Grigsby’s International Trade team. 

Dentons Cohen & Grigsby will continue to monitor these developments and provide additional updates. We provide our clients access to resources in Canada, Mexico, China, and globally to help navigate these rapidly changing trade measures.

1. “Energy resources” covers 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. There is no guidance on the tariff treatment of electricity originating in Canada or Mexico.↩
2. The European Union has preemptively warned it will respond firmly if similarly targeted by U.S. tariffs.↩
3. Please see DCG’s alert Trade Forecast Quick Implementation discussing implementation mechanisms for Tariffs. The use of IEEPA to impose tariffs is relatively untested and may face legal challenges from affected importers or other parties. IEEPA authorizes the President to regulate commerce during a national emergency presenting an unusual and extraordinary threat to the U.S. The majority of prior legal challenges to the use of IEEPA have not been successful, given the broad authority contained in the statute and U.S. courts' deference to the Executive Branch in matters of national security.↩
4. Customs will provide guidance on the certification process that importers must use for the “goods in transit” exception referred to in the executive orders.↩
5. According to reports, as of March 4, 2025, China expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.↩