How Trump’s Tariff Policies May Impact International Trade: Canada, Mexico, China, and More 

Import containers full of goods impacted by Trump tariffs from China, Mexico, and Canada
Should you be bracing for more tariffs? Stay up to date on the president-elect’s proposed tariffs concerning China, Mexico, and Canada.
November 27, 2024
Last Modified: March 6, 2025
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During his campaign and since being confirmed as the President-Elect, Donald Trump has been vocal about imposing various new tariffs. Many of those proposed actions are now a reality and will be impacting trade costs significantly.

Key Takeaways:

  • After granting Canada and Mexico a delay on implementation, President Trump has confirmed that tariffs will be enforced on incoming goods from these nations starting March 4, 2025.
  • Goods from Mexico and Canada that specifically fall under the USMCA will still get a break on the 25% tariff.
  • On February 1, President Trump signed three executive orders confirming that goods from Canada and Mexico will be subject to a 25% tariff, and goods from China will be subject to a 10% tariff.  
  • Importers working to plan for increased costs should consider where their supply chain will be most impacted.

Today we’re going to focus on what we already know about Trump’s tariff policy and what importers can do in anticipation of the changes. 

Update: March 4, 2025

The 30-day hold on President Trump’s executive orders imposing tariffs on Mexico and Canada officially expired as of March 4, 2025. 

From this time forward, imports entering from Mexico and Canada to the United States may be charged a 25% ad valorem duty in addition to any standard duties that may be owed. 

However, the president has agreed to a tariff break with regard to products that are part of the current U.S.-Mexico-Canada Agreement (USMCA). Examined more closely, that covers about 50% of Mexican imports and 38% of Canadian imports.  

Energy-related imports from Canada may still be subject to a slightly lower 10% tariff. 

Products from China, which never reached a deal with the U.S. in February, have been subject to a 10% duty rate. As of March 4, that has now been doubled to 20% ad valorem. Importers should also understand that such duties are in addition to current tariffs owed as part of any Section 301 tariffs.

Responses from China and Canada

China already imposed counter tariffs on certain products in response to the initial 10% duty increase. After the announcement was made that the rate would increase to 20% ad valorem, further actions were taken. 

Officials from Beijing are planning in placing a tariff between 10-15% on various agricultural products, including:

  • Chicken
  • Pork
  • Soy
  • Beef

These tariffs are set to take effect on March 10, 2025. 

Canada also has a series of tariffs prepared in response, set to 25%, which will take effect in two stages. The first stage of increases was put in place at the same time as the U.S. actions: 12:01 AM March 3. 

Based on the information they released in February, the first round of retaliatory tariffs is likely to impact about $21 billion (USD) in products. After 21 days, additional measures targeting another $86.5 billion in products will be imposed as well, if no agreements go into effect.

No official word from Canada has stated whether these measures will be rolled back in light of the agreement with President Trump allowing USMCA products to continue flowing between the nations without paying additional duties.

Most Impacted Products

Imports that contribute to major industries within the United States are likely to be impacted, resulting in potential shortages and increased consumer prices. Oil and petroleum products one import that the U.S. gets from both, but let’s go into some specifics. 

Products from Mexico include:

  • Cars and trucks
  • Automotive parts and accessories
  • Computers and related accessories
  • Electrical and telecom equipment
  • Medicinal equipment
  • Fresh fruits

Products from Canada also include cars and automotive parts as well as:

  • Aluminum and bauxite
  • Metal products
  • Baked goods
  • Meat
  • Gold

After a request from three major American automakers, President Trump did allow for a one month tariff exclusion on car imports from both countries. According to White House press secretary Karoline Leavit, the exclusion was granted "so they[automakers] are not at an economic disadvantage".

Regardless of product, all importers should be speaking with their customs brokers to confirm product codes and corresponding new tariff amounts to be owed upon entry.

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Update: February 3, 2025

On February 1, 2025, President Trump moved forward with the proposed tariffs on goods from Mexico, Canada, and China. The tariffs fall in line with his America First Trade Policy and were set to remain in effect indefinitely.

Here’s how the tariffs were initially announced:  

  • Canada: 25% additional ad valorem duty on all imports except energy or energy resources, which will be charged at 10% 
  • Mexico: 25% additional ad valorem duty, no exceptions
  • China: 10% additional ad valorem duty, in addition to any current tariffs, with no exceptions listed. Products from Hong Kong are also included as part of the order.  

No specific HTS code list accompanied any of the three new executive orders, so importers would expect that the import of any product intended for consumption in the U.S. will be subject to the additional tariff. 

However, importers should know that tariffs against Mexico and Canada will be delayed at least 30 days. Each nation reached a tentative agreement with the U.S., which has not rescinded the order, but provided further time for negotiations and stabilization.

For importers bringing in goods China the tariffs will still be enforced as of 12:01 am EST on February 4, 2025 on imports either entering the country for consumption or being withdrawn from a bonded warehouse for consumption. 

In addition to the ad valorem tariffs being applied to imports from each of the nations, there are other provisions written into the order to provide clarity on specific exceptional situations. 

  • Goods that were already on their final mode of transit before 12:01 AM on February 1 for entry to the U.S. will be exempt from the tariff. 
  • Section 321 entries, qualifying for duty-free entry under de minimis, were initially suspended. This order was stepped back on February 7 until the Secretary of Commerce determines that a suitable uniform system for the tariff collection could be put in place..
  • No duty drawbacks will be available for duties paid under any of the three executive orders. 
  • Use of U.S. free trade zones (FTZs) will be limited to products that qualify for privileged foreign status once enforcement begins and be subject to standard tariffs for the applicable HTS code once removed for consumption. 

All orders were pushed through as part of a national emergency under the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act. 

Have Canada, Mexico, or China Imposed Retaliatory Tariffs?

Canada, under the direction of Prime Minister Justin Trudeau, initially responded by declaring a matching 25% tariff on two lists of imported American products also set to be enforced on February 4, 2025. 

The first list covered beverages, cosmetics, and various paper products with a trade value of $20 billion USD. The second list would have included passenger vehicles, trucks, steel and aluminum products, various types of produce, pork, and dairy products as a start. Trade value for the second list is estimated at $85 billion USD. Like the proposed U.S. tariffs - these remain paused as Canada and the U.S. work to come to a long-standing agreement.

Mexican President Claudia Sheinbaum initially stated in a social media post that her country would also be imposing retaliatory tariffs, but as mentioned, was they were able to reach an agreement with President Trump resulting in enforcement being delayed by one month.

Representatives from the People’s Republic of China (PRC) have responded by announcing they will apply tariffs to several American products and plan to launch an anti-trust investigation into Google, potentially placing a sanction.

Should China move forward with it's counter tariffs, they would take affect Monday, February 10, 2025. The following products would be affected:

  • Coal and liquified natural gas: 15% tariff
  • Crude oil: 10% tariff
  • Agricultural machinery: 10% tariff
  • Large-engine cars: 10% tariff
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What has President-Elect Trump Said About New Tariffs?

Increasing tariffs on U.S. imports was one of Trump's main platforms during the presidential campaign. At that time, he claimed he would impose up to a 60% tariff on imports from China and 10% tariffs on imports from other nations, primarily the EU. 

Now, with Trump set to take office in less than two months, he has provided further details on what he plans to enact starting day one, January 20. 

On November 25, 2024, Trump posted his proposed tariff plan for Mexico and Canada to his social media site, Truth Social. Among other things it states: “I will sign all necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the United States, [...].” 

In a separate post that same day, he addressed plans for China, stating the following: “[...] we will be charging China an additional 10% tariff, above any additional tariffs, on all of their many products coming into the United States of America.”  

How Might Proposed Tariffs Impact Trade With…

For those involved in international trade, managing tariffs is nothing new. Tariffs have been imposed on various Chinese products since Trump enacted Section 301 Tariffs against that nation during his last term in office in 2018. 

However, the USMCA trade agreement, of which Mexico and Canada make up two thirds, has allowed duty-free trade among the three nations for several years for a wide variety of products and raw materials. The imposition of a tariff here could have wide-reaching consequences.

Let’s take a closer look into each of these situations. 

China

In September 2024, the Biden administration confirmed that section 301 tariffs on various Chinese products would continue. New tariffs and an increase of several existing tariffs also went into effect. 

While some businesses have gotten a break through the use of the tariff exclusion process, their availability has significantly decreased. 

An additional 10% tariff (on top of existing tariffs) could drive the import price of products past the point of profitability with current pricing. That leaves businesses with three possible solutions:

  • Find alternative suppliers
  • Absorb the increased cost as a business
  • Pass along the tariff cost to the consumer

With trade relations between the two nations already tense, it may also be the final straw for certain companies to move production and sourcing out of China entirely. Importers able to benefit from a current tariff exclusion (likely because the product simply can’t be reliably sourced outside of China) will have far fewer choices. 

Supply chain disruptions as new sources are confirmed and set up are also a strong possibility. 

Related: How to Calculate Import Duties and Taxes From China to the US

Mexico

Since 2023, Mexico has enjoyed the benefits of being the USA’s number one trade partner. Businesses on both sides of the border have benefited from the nearly free trade policies. 

A 25% tariff on incoming products would be in direct contradiction to the USMCA. However, there are several other questions we’re still left with.

  • Will the tariff impact goods made in Mexico with U.S. raw materials?
  • Will U.S. companies with nearshoring operations be required to pay the tariff?
  • Could the tariff be limited to Chinese products that are entering the U.S. through Mexico?

It’s impossible to truly predict how businesses, not to mention the Mexican government, would respond. However, trade in the following industries would likely feel the greatest impact:

  • Vehicles and automotive parts
  • Electronics
  • Heavy machinery
  • Medical devices
  • Agriculture

The steel industry has already faced some of these issues. Section 232 tariffs on steel and aluminum were recently raised in response to abundant amounts of foreign materials from countries (such as China) exporting to Mexico in an attempt to bypass heavy anti-dumping duties imposed elsewhere.

Most recently, though, a flat 25% tariff on steel and aluminum imports were added, removing exceptions for Mexico and Canada.  

Related: Import Costs From Mexico

Canada

Like Mexico, Canada has benefited from USMCA provisions that allow it to trade freely with its southern neighbors. 

While not the manufacturing powerhouse that Mexico is becoming, Canada exports abundant amounts of oil to both nations. After expanding its pipeline, the U.S. on average imports 4 million barrels of crude oil per day, with most traveling to domestic refineries. 

In terms of commodities, Canada is also a top source of lumber, meat, grains, and electronics. Since both countries share similar production, quality standards, and a common language,  trade in these and most other commodities is often simpler. The extensive land border also tended to make shipping less expensive. 

An additional 25% tariff doesn’t remove those benefits, but it also makes them far less profitable. While the USD is stronger than the Canadian Dollar, it’s hardly a built-in profit margin when compared to Mexican Pesos (as an example). Not to mention, labor costs in Canada are similar to that of the U.S., so manufactured imports also takes a hit.

Related: How Much Does it Cost to Import Goods From Canada?

What Can Importers Do Now?

As we mentioned at the start, these tariff proposals are just that: proposals. Until President-Elect Trump is officially in office, nothing can happen. Of course, that doesn’t mean you shouldn’t prepare for it. 

We suggest taking time to do the following:

  • Examine your costs and sales pricing: Taking a close look at what you’re paying for versus what’s earned back can provide insight into where along your supply chain you’re going to feel the greatest impact. It may also give you ideas on where you may be able to rebalance costs better. 
  • Stay informed on current events: Your import business isn’t only affected by U.S. policies. Keep an eye out for how other countries may respond to the situation. Also, make sure you’re not confusing proposals with official announcements. 
  • Look for opportunities to diversify: Sourcing products from multiple suppliers protects your supply chain from potentially disruptive events (like this could be). Other nations with free trade agreements can help you keep prices balanced. 
  • Work with a customs broker: Brokers make it their job to know the ins and outs of the trade world as it impacts their nation’s import business. They can guide you through tariff changes and help with imports from other nations as needed.    

No matter what happens with Trump’s tariff policy changes, your business will benefit from your active interest and beneficial partnerships with trade professionals. 

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Stay Informed and Work With Experts at USA Customs Clearance

At USA Customs Clearance, we want to see your import business ventures succeed. We’ll be following these potential tariff changes ourselves, and our export customs agents are staying informed so they’re ready to help when you need it.

Have more questions? Schedule a 1-on-1 consultation with one of our customs experts and get the answers you’re looking for. 


Call us directly at (855) 912-0406 to get started, or send us a direct mention through our online contact form

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