The Trump administration implemented tariffs against Canada and Mexico effective March 4, 2025, arising from declared national emergencies at both the northern and southern U.S. borders pursuant to the International Economic Emergency Powers Act (IEEPA).

Implementation of Tariffs

On March 3, 2025, U.S. Customs and Border Protection (CBP) issued draft Federal Register notices (to be published March 6, 2025): (1) a Notice of Implementation of Additional Duties on Products of Canada Pursuant to the President’s Executive Order 14193, Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border; and (2) a Notice of Implementation of Additional Duties on Products of Mexico Pursuant to the President’s Executive Order 14194, Imposing Duties to Address the Situation At Our Southern Border, confirming the implementation of the following IEEPA tariffs, effective March 4, 2025:

  • 10% ad valorem tariffs on energy products of Canada,
  • 25% ad valorem tariffs on other products of Canada, and
  • 25% ad valorem tariffs on products of Mexico.

The IEEPA tariffs are in addition to any other general duties, special duties including antidumping/countervailing duties (AD/CVD), Section 301, Section 232, or other taxes, fees, and charges.

Country of Origin: The country of origin will be determined by the criteria in 19 C.F.R Part 102 and the last place of substantial transformation.  IEEPA tariffs will also apply to products of Canada and Mexico even if they qualify under the United States-Mexico-Canada Agreement (USMCA).

Customs Entries: Effective March 4, 2025, companies must comply with customs entry procedures for these goods using HTSUS codes 9903.01.01-.03 for products of Mexico and 9903.01.10-13  for products of Canada.

FTZs: All goods entering foreign trade zones (FTZs) on or after 12:01 am EST on March 4, 2025, must enter under “privileged foreign status” unless otherwise eligible to enter under “domestic status.”

Drawback: Duty drawback will not be available for products subject to these tariffs imposed under the IEEPA.

De Minimis:TheSection 321 de minimis exemption remains available for eligible articles.

For more information, see CBP messages at the Cargo Systems Messaging Service (CSMS) for Canada and Mexico.

Exclusions from Tariffs

The only articles expressly excluded from the ad valorem duties at this time include:

  • postal, telegraphic, telephonic, or other personal communications, which do not involve a transfer of anything of value;
  • donations, by persons subject to the jurisdiction of the United States, of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering;
  • informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds; and
  • any transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use.

HTSUS Chapter 98 “Special Classifications” will continue to apply to potentially exempt certain articles from tariffs except that updated valuation rules will apply. Companies may want to review Chapter 98 to determine potential eligibility.

Retaliatory Tariffs of Canada & Mexico

In response, Prime Minister Justin Trudeau of Canada announced retaliatory tariffs. The first tranche of retaliatory tariffs of roughly CA$33 billion went into effect today (see here). The second tranche of retaliatory tariffs of roughly CA$155 billion is scheduled to go into effect in 21 days (March 25).   

President Claudia Sheinbaum of Mexico began her Tuesday press briefing with a statement criticizing the 25% tariffs. She announced that Mexican officials will be speaking with President Donald Trump on Thursday and warned that if the tariffs remained, Mexico would announce countermeasures, including retaliatory tariffs, on Sunday.

Possible Tariff Relief

U.S. Secretary of Commerce Howard Lutnick indicated that President Donald Trump may announce a compromise with Canada and Mexico on Wednesday, March 5, 2025. In an interview with Fox Business, Lutnick mentioned that both Canadian and Mexican officials had been in discussions with President Trump throughout the day, seeking to address U.S. concerns.

On March 3, 2025, the White House issued an Executive Order to further address the synthetic opioid supply chain in China by increasing the current tariffs on all products of China (and Hong Kong) from 10% to 20%. China immediately responded by announcing that it will implement additional tariffs of up to 15% on key U.S. agricultural products.

Implementation of Tariffs

In order to implement the additional tariffs, on March 3, 2025, U.S. Customs and Border Protection (CBP) has issued draft Federal Register notice (to be published March 6, 2025), Implementation of Additional Duties on Products of the People’s Republic of China Pursuant to the President’s Executive Order 14195, Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China. The same day, CBP published a message via the Cargo Systems Messaging Service (CSMS) providing further clarifications, including the following:

Effective Dates & Rates:

  • From February 4, 2025, to March 3, 2025, goods from China and Hong Kong are subject to an additional 10% duty under HTSUS classification 9903.01.20.
  • Starting on March 4, 2025, the additional duty rate increases to 20% under HTSUS classification 9903.01.24.

These duties apply in addition to all other applicable duties, taxes, fees, exactions and charges. CBP further notes that products of China that are eligible for temporary duty exemptions or reductions will be subject to the additional 20% ad valorem rate of duty.

Exclusions: Certain products are excluded from these additional duties, including donations for human suffering relief, informational materials, and goods in transit before February 1, 2025.

Chapter 98: Goods entered under HTSUS Chapter 98 provisions are generally exempt from these additional duties, except for specific subheadings related to repairs, alterations, or processing performed in China and Hong Kong.

FTZs: Products from China and Hong Kong admitted into U.S. foreign trade zones (FTZs) must be classified under “privileged foreign status” and will be subject to the applicable duties upon entry for consumption.

Drawback: No drawback is available for these additional duties.

De Minimis: The Section 321 de minimis exemption currently remains available for eligible articles.

For prior updates on these recent China tariffs, see Thompson Hine updates of February 5, 2025 and February 3, 2025.

China’s Retaliation

In reaction to the new tariffs imposed by the United States, China announced on March 4, 2025 that it will implement additional tariffs of up to 15% on imports of key U.S. agricultural products, including chicken, wheat, corn, cotton, soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables and dairy products. The tariffs will take effect on March 10, 2025. Goods already in transit will be exempt until April 12, 2025. China also introduced other measures targeting the United States, which include: (1) halting lumber imports from the United States; (2) suspending permits of three U.S. companies for exporting soybeans to China; (3) expanding export controls on certain items in an effort to target a number of U.S. defense contractors, and (4) initiating a circumvention investigation on the existing antidumping duty order on imports of American fiber optic products.

On March 1, 2025, President Donald Trump signed an Executive Order (EO) initiating an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects on national security of imports of timber, lumber and their derivative products (including paper products, furniture and cabinetry) dumped into the U.S. market. The EO states that such products are “a critical manufacturing industry essential to the national security, economic strength, and industrial resilience of the United States…. [that plays] a vital role in key downstream civilian industries, including construction.” This action triggers an investigation process that could result in new tariffs if the Trump administration determines that U.S. reliance on suppliers abroad poses a threat to national security.

While acknowledging that the United States has ample timber resources, the EO notes that “[t]he current United States softwood lumber industry has the practical production capacity to supply 95 percent of the United States’ 2024 softwood consumption. Yet, since 2016 the United States has been a net importer of lumber.” The EO also notes that the U.S. military “spends over 10 billion dollars on construction. The military also invests in innovative building material technology, including processes to create innovative wood products.” For this investigation, “timber” refers to wood that has not been processed and “lumber” refers to wood that has been processed, including wood that has been milled and cut into boards or planks.

The Secretary of Commerce will initiate a formal investigation and within 270 days submit a report to President Trump with findings and recommendations on potential actions to mitigate any national security threats. Among the factors the investigation will assess are: (i) the current and projected demand for timber and lumber in the United States; (ii) the role of foreign supply chains, particularly of major exporters, in meeting U.S. timber and lumber demand; (iii) the impact of foreign government subsidies and predatory trade practices on U.S. industry competitiveness; (iv) the feasibility of increasing domestic timber and lumber capacity; and (v) the impact of current trade policies on domestic timber, lumber, and derivative product production, and whether additional measures, including tariffs or quotas, are necessary to protect national security.

While the Section 232 process allows for public comment and hearings, it is unknown at this time whether Secretary of Commerce Howard Lutnick will direct such a process.

The White House issued two Executive Orders on March 2, 2025 amending the February 1, 2025 Executive Orders Imposing Duties to Address the Situation at Our Southern Border and Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border (see Thompson Hine Update of February 3, 2025). The March 2 amendments for Mexico and for Canada indicate that products of those two countries using the Section 321 de minimis duty-free exemption (a.k.a., the “$800 rule”) may continue to do so but the exemption will cease to be available upon notice “by the Secretary of Commerce to the President that adequate systems are in place to fully and expeditiously process and collect tariff revenue applicable pursuant to subsection (a) of this section for covered articles otherwise eligible for de minimis treatment.” This language aligns with the amendment made on February 5, 2025 regarding the 10% tariffs imposed on China that followed an outcry from the trade and the United States Postal Service (USPS) among others, that customs clearance processes were not set up to handle the large volumes of de minimis shipments.

On February 26, 2025, two U.S. chassis manufacturers representing the domestic industry – petitioners Cheetak Chassis Corporation and Stoughton Trailers, LLC – filed petitions with the Department of Commerce seeking the initiation of dumping and countervailing duty investigations into certain chassis and subassemblies imported from Mexico, Thailand, and Vietnam that are allegedly being or are likely to be sold at less than normal value and are being subsidized by the governments of those countries. The petitions allege these “unfairly traded imports have materially injured the U.S. domestic industry producing chassis and threaten to cause further material injury if relief is not granted.” The petitioners claim that they have been forced to compete with imports dumped at substantial margins: Mexico – 32.37%; Thailand – 234.06%; and Vietnam – 304.68%. Regarding countervailable subsidies, the petitioners claim that the governments of Mexico and Thailand provide support to their industrial chassis manufacturers that have allowed for expansion of their producers’ capacity, production and exports to the United States.

The physical characteristics of the covered products, which define the scope of the proposed investigations, are as follows:

The merchandise covered by these investigations consists of chassis and subassemblies thereof, whether finished or unfinished, whether assembled or unassembled, whether coated or uncoated, regardless of the number of axles, for carriage of containers, or other payloads (including self-supporting payloads) for road, marine roll-on/roll-off (RORO) and/or rail transport. Chassis are typically, but are not limited to, rectangular framed trailers with a suspension and axle system, wheels and tires, brakes, a lighting and electrical system, a coupling for towing behind a truck tractor, and a locking system or systems to secure the shipping container or containers to the chassis using twistlocks, slide pins or similar attachment devices to engage the corner fittings on the container or other payload.

These products are used in transportation of typically intermodal (e.g., ship, rail, truck) cargo containers in shipments from one location to another. Chassis may be imported into the United States in a fully assembled form or imported as subassemblies, with most or all of the integral items required to assemble a chassis into its finished form.

The Department of Commerce’s International Trade Administration (ITA) has 20 days to review and decide if the petitions meet all statutory requirements. If so, and the investigation is initiated, interested parties will have an opportunity to enter an appearance and file comments. 

Thompson Hine LLP’s International Trade practice group has attorneys and professionals who handle such trade remedy cases and who are available to provide further details on this action.

On February 25, 2025, President Donald Trump signed an Executive Order (EO) initiating an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects on national security of imports of copper in all forms, including but not limited to: (i) raw mined copper; (ii) copper concentrates; (iii) refined copper; (iv) copper alloys; (v) scrap copper; and (vi) derivative products.  The EO states that “[c]opper is a critical material essential to the national security, economic strength, and industrial resilience of the United States…. [that plays] a vital role in defense applications, infrastructure, and emerging technologies, including clean energy, electric vehicles, and advanced electronics.”  This action triggers an investigation process that could result in new tariffs if the administration determines that U.S. reliance on overseas suppliers poses a threat to national security.

While acknowledging that the United States has sufficient copper reserves, the EO and an accompanying White House Fact Sheet note that the United States “faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted, and refined copper.”  U.S. smelting and refining capacity lags behind global competitors, including China which controls over 50% of global smelting.  The Fact Sheet states that reliance on copper imports has surged “from virtually 0% in 1991 to 45% of consumption in 2024, heightening risks to supply chain security” and potentially threatening to disrupt copper availability for U.S. defense and industry needs.

The Secretary of Commerce will initiate a formal investigation and within 270 days submit a report to President Trump with findings and recommendations on potential actions to mitigate any national security threats.  Among the factors the investigation is to assess are:  (i) the extent to which domestic production, smelting, refining, and recycling can meet demand; (ii)  the role of foreign supply chains; (iii) the impact of foreign government subsidies, overcapacity, and predatory trade practices on U.S. industry competitiveness; (iv) the potential for export restrictions by foreign nations; and (v) the feasibility of increasing domestic copper mining, smelting, and refining capacity.   

While the Section 232 process allows for public comment and hearings, it is unknown at this time whether Secretary of Commerce Howard Lutnick will direct such a process.

On February 21, 2025, the Office of the U.S. Trade Representative (USTR) announced its proposed actions in response to an earlier determination finding that China was targeting the maritime, logistics, and shipbuilding sectors for dominance. This determination followed an investigation under Section 301 of the Trade Act of 1974. This determination authorizes actions in response. USTR has proposed the following:

  • Charging U.S. port service fees on Chinese maritime transport operators of up to $1 million per entrance or up to $1,000 per ton of the vessel’s capacity.
  • Charging U.S. port services fees on maritime transport operators: (i) with fleets comprised of Chinese-built vessels, and (ii) with prospective orders for Chinese vessels. These fees would range from $500,000 to $1.5 million; and it appears that such service fees could be combined and cumulative.
  • Allowing service fee remission for maritime transport via U.S.-built vessels of up to $1 million per entry into a U.S. port of a U.S.-built vessel engage in international maritime transport services. 
  • Restrictions on services to promote the transport of U.S. goods on U.S. vessels. These would include annual increasing requirements that a percentage of exports of U.S. products be on U.S.-flagged vessels by U.S. operators: starting with requiring 1% in year one and up to 15% of U.S. goods restricted to export on U.S.- flagged vessels by U.S. operators, of which 5% must also be U.S.-built vessels by year seven.
  • Potential actions to restrict use of the Chinese-promoted National Transportation and Logistics Public Information Platform (LOGINK).

USTR has also indicated that it may consider entering into negotiations with allies and partners in order to counteract China’s acts, policies, and practices and to reduce dependencies on China in the maritime, logistics, and shipbuilding sectors. 

In releasing the report and determination in January 2025, the USTR determined that China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance is actionable under Sections 301 and 304 of the Trade Act. The determination found that China’s targeting for dominance is unreasonable and burdens or restricts U.S. commerce “because it displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on China, increasing risk and reducing supply chain resilience. These factors undercut business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors; restrict competition and choice; create economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the U.S. economy; and undermine supply chain resilience. For more background information on this investigation filed in March 2024 by five national labor unions, see Thompson Hine’s Bulletin of April 23, 2024, and past Updates of January 17, 2025, April 17, 2024 and March 13, 2024.

Request for Public Comments

USTR is requesting public comments from interested parties regarding these proposed actions. Any comments must be submitted no later than March 24, 2025 via USTR’s electronic portal: https://comments.ustr.gov/s/. The docket number for written comments and rebuttal comments is USTR–2025–0002. The docket number for requests to appear is USTR–2025–0003.

USTR will also hold a public hearing on the proposed action in this investigation in the main hearing room of the U.S. International Trade Commission, 500 E Street S.W., Washington DC 20436, on March 24, 2025. Any request to appear at this hearing must be submitted no later than March 10, 2025, via the same USTR portal under docket number USTR–2025–0003. Requests to appear must include a summary of testimony, and may be accompanied by a pre-hearing submission. Remarks at the hearing are limited to five minutes.

On February 21, 2025, President Trump issued the America First Investment Policy Memorandum (“Memorandum”). The Memorandum aims to promote foreign direct investment (FDI) from “allies and partners” while restricting inbound investment from and outbound investment to “foreign adversaries,” such as China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and the Nicolás Maduro regime in Venezuela.

To achieve its FDI aims, the Memorandum requests a review of various Committee on Foreign Investment into the United States (CFIUS) procedures, limits the environmental assessment of large scale investments into the United States, and directs various agencies such as the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and the Department of Labor to review, “based on the auditability, corporate oversight, and evidence of criminal or civil fraudulent behavior, all foreign adversary companies currently listed on domestic exchanges while requiring the Secretary of Labor to publish updated fiduciary standards under the Employee Retirement Income Security Act of 1974 for investments in public market securities of foreign adversary companies.” The president also orders these agencies “[t]o protect the savings of United States investors and channel them into American growth and prosperity,” prompting his administration to:

  • “determine if adequate financial auditing standards are upheld for companies covered by the Holding Foreign Companies Accountable Act;
  • review the variable interest entity and subsidiary structures used by foreign-adversary companies to trade on United States exchanges, which limit the ownership rights and protections for United States investors, as well as allegations of fraudulent behavior by these companies; and
  • restore the highest fiduciary standards as required by the Employee Retirement Security Act of 1974, seeking to ensure that foreign adversary companies are ineligible for pension plan contributions.”

To balance promoting investment with maintaining national security, the Memorandum also adopts the following:

  • Fast-Track Investment Process: It creates a “fast-track” process to encourage investment from allied and partner sources in U.S. businesses involved in advanced technology, with security measures to ensure foreign investors avoid U.S. adversaries.
  • Environmental & CFIUS Reviews: It proposes mechanisms to potentially eliminate Environmental Protection Agency (EPA) and related agency reviews for large investments (over $1 billion) and CFIUS mitigation agreements, while expanding CFIUS jurisdiction to include new greenfield, start-up technology, and farmland investments.
  • Reporting & Restrictions on Investments: It aims to reduce reporting burdens on “passive investments” (as defined in the Memorandum) but may impose new restrictions on U.S. pension funds, endowments (particularly universities), and publicly traded securities for outbound investments in sectors like biotech, hypersonics, aerospace, advanced manufacturing, and directed energy in adversary countries.

The Memorandum also expressly incorporates the America First Trade Policy Memorandum issued on the first day of the Trump administration (see Thompson Hine Update of January 22, 2025). As with the trade policy memorandum, the present Memorandum invokes the authority of the International Emergency Economic Powers Act (IEEPA), which the President relied upon to impose tariffs on China, Canada, and Mexico (see Thompson Hine Update of February 3, 2025). However, in contrast to the America First Trade Policy Memorandum, which required a series of reports to be completed by April 1, 2025, the present Memorandum does not have any procedural requirements to satisfy before implementation.

On February 20, 2025, the Office of the United States Trade Representative (USTR) announced that it is seeking comments from the public to identify and address unfair and non-reciprocal foreign trade practices. This initiative is part of the broader America First Trade Policy Presidential Memorandum and the Reciprocal Trade and Tariffs Presidential Memorandum.

The USTR is particularly focused on submissions related to the largest trading economies, such as G20 countries, and those with the largest trade deficits in goods with the United States. These countries include Argentina, Australia, Brazil, Canada, China, the members of the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Russia, Saudi Arabia, South Africa, Switzerland, Taiwan, Thailand, Türkiye, the United Kingdom, and Vietnam.

Interested parties are encouraged to provide detailed information, including:

  • The foreign country or economy concerned.
  • The specific practice or trade arrangement of concern.
  • A brief explanation of how the practice or trade arrangement operates.
  • An explanation of the impact or effect of the practice or trade arrangement on the interested party or on U.S. interests generally.
  • Quantification of the harm or cost (including actual cost or opportunity cost) to American stakeholders.

The deadline for submission of comments is March 11, 2025. Comments can be submitted through the USTR’s online portal at https://comments.ustr.gov/s/. The docket number for this request is USTR-2025-0001.

For more details, you can view the Federal Register notice here as well as an earlier Thompson Hine Update of February 13, 2025.

steel

On February 14, 2025, the White House released annexes specifying steel (see page 24) and aluminum (see page 19) derivative items that will be subject to the 25% tariffs under Section 232, as announced by President Trump on February 10, 2025. For further details, refer to our blog post of February 12, 2025.

The items subject to the Section 232 25% tariffs are listed in the annexes according to their 8- or 10-digit Harmonized Tariff Schedule of the United States (HTSUS) codes, without corresponding HTSUS descriptions. The steel derivative annex includes items from HTSUS Chapters 73, 84, 85, and 94. The aluminum derivative annex covers items from Chapters 66, 76, 83, 84, 85, 87, 88, 90, 94, 95, and 96 of the HTSUS.

“For purposes of implementing the requirements in [these proclamations], importers of [steel derivative and aluminum derivative articles] shall provide to U.S. Customs and Border Protection within the Department of Homeland Security (CBP) any information necessary to identify the steel content used in the manufacture of steel derivative articles imports, covered by this Proclamation. CBP shall implement the information requirements as soon as practicable.”

A public notice will be issued to announce when the tariffs will take effect, once “adequate systems are in place to fully, efficiently, and expediently process and collect tariff revenue for covered articles.”