On Saturday, President Trump signed executive orders imposing stiff tariffs on three of the United States’ biggest trading partners. The orders impose a 25 percent tax on most imports from Canada and Mexico, while goods from China will be charged a 10 percent import tax. The tariffs were issued pursuant to the International Emergency Economic Powers Act (IEEPA), citing “[t]he extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, [which] constitutes a national emergency.”
Retaliatory tariff actions:
China announced a 15% tariff on coal and liquified natural gas imports from the United States. China also threatened to impose a 10% tariff on US crude oil, agricultural machinery, pickup trucks, and large-engine cars. Those tariffs are anticipated to go into effect on February 10th.
Retaliatory non-tariff actions:
China announced new export controls on several dozen metal products and related technologies including tungsten (a mineral used in a number of industrial and defense applications) as well as tellurium, which is used to make solar cells.
China also added biotech company Illumina and the apparel company PVH Group, which owns the Calvin Klein and Tommy Hilfiger labels, to China’s unreliable entities list, saying these companies “violated normal market trading principles.” A Chinese Ministry of Commerce spokesperson stated that the companies engaged in “discriminatory measures against Chinese enterprises,” but failed to provide further details. Companies on the unreliable entities list can be subject to fines and other sanctions including a revocation of work permits for non-Chinese staff.
Separately, China’s State Administration for Market Regulation issued a statement that Google is under investigation for suspected violation of China’s anti-monopoly law. For a number of years Google services have been blocked in China, including the company’s Gmail email services, Chrome browser and search engine.
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These are the duties imposed by Trump
The White House released Executive Orders placing additional duties on all imports from Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA), among other authorities. The Executive Orders and associated Fact Sheet are linked below.
Duties:
Canada:
25% ad valorem duties on all imported products of Canada, except “energy or energy resources”;
10% on “energy or energy resources” (defined in section 8 of the National Energy Emergency Proclamation 14156 of January 20, 2025, 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 . . . .”).
Mexico: 25% ad valorem duties on all imported products of Mexico; and
China: 10% ad valorem duties on all imported products.
Legal Authority: IEEPA and initial national fentanyl emergency announcement in Proclamation 10886 of January 20, 2025.
Effective Date: Effective for goods entered or withdrawn for consumption on or after 12:01 am February 4, 2025, except for goods already in transit as of 12:01 am February 1, 2025, with importer certification.
Additional Details:
Duties are in addition to all other applicable duties including those required by AD/CVD law, Section 232, Section 301, and normal customs duties.
Duty drawback is not available.
De minimis treatment is not available.
President may expand scope or increase duties in response to Canadian, Mexican, or Chinese retaliation.
Certain cabinet agencies are tasked with recommending additional action if Canada fails to take steps to alleviate illegal migration and the illicit drug crisis.
Exclusions: No product exclusions, and no process for applying for exclusions, are set forth in the Executive Orders. The Executive Orders do state that the Secretary of Homeland Security, in consultation with the Secretary of the Treasury, the Attorney General, and the Secretary of Commerce, is authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to implement the order. This may allow for an exclusion process yet to be announced if the tariffs remain in effect for an extended period. If any exclusion process operates similar to the Section 232 process, we might anticipate that exclusions could be give retroactive effect. The lack of an announced exclusion process does not mean that the Administration will not entertain exclusions.
Implementation: A Federal Register notice will be published, which will announce changes to HTSUS. This would seem to indicate normal country of origin rules will apply, rather than the USMCA rules of origin for preferences. More clarification may come with the Federal Register notice in the next few days.
Please find the White House Fact Sheet and Three Accompanying Executive Orders here:
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Tariff enforcement has traditionally been handled as a civil matter under the False Claims Act (FCA). However, given the centrality of tariffs in President Trump’s broader economic, immigration and national security agendas, it is likely that the U. S. Department of Justice (DOJ) will be tasked with criminal enforcement of tariff evasion, to punish egregious instances of wrongdoing and to provide a powerful general deterrent to both U.S. and foreign businesses.
Read more here.
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