After the pause on the 25% tariffs on Mexican and Canadian imports expired on Tuesday, March 4, 2025, all Canadian and Mexican imports (with the exception of some energy imports at a lower rate) were subject to a 25% additional tariff. On Wednesday, there was an announcement that some automotive-related products may be exempt from the tariffs until April 2, 2025. At that time, it was not entirely clear which products would be exempt.
On Thursday, March 6, President Donald Trump signed two new executive orders providing for a pause in the 25% tariffs for certain imports from Canada and Mexico. Here is what we know at this time:
- Although each executive order specifically mentions the potential disruption caused by tariffs to the U.S. automotive industry, the actual exemption granted appears to be broader than just autos and auto components.
- Specifically, the executive orders pause the 25% tariff imposition on “articles that are entered free of duty as a good of Canada under the terms of general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS), including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the HTSUS, as related to the Agreement between the United States of America, United Mexican States, and Canada.”
- This language appears to have the effect of exempting all goods covered by the 2020 U.S.-Mexico-Canada Agreement (USMCA), not just automotive products.
- The exemption applies to goods entered or withdrawn from warehouses for consumption as of 12:01 a.m. EST on March 7, 2025.
- Although there has been some indication that the pause will be in place only until April 2, 2025, the executive orders themselves do not include an expiration date.
- Additionally, tariffs on potash used by U.S. farmers from Canada or Mexico will be subject to 10% tariffs not 25%.
Meanwhile, tariffs on Chinese imports increased by another 10% to 20% with no mention or discussion of any pause or other exemptions at this time.
