Tariffs and Trade Actions: Summing Up the Last Few Days

By: Brooke M. Ringel, Paul C. Rosenthal, Kathleen W. Cannon, Joshua Morey, Jennifer E. McCadney, Elizabeth C. Johnson, Dana S. Wood, Joshua Kagan, Maggie C. Crosswy (Kelley Drye)

In this blog post, the team at Kelley Drye breaks down the latest tariff developments, which have been unfolding at a rapid pace. Whether you’re a small manufacturer, part of a multinational corporation, or simply someone trying to keep up with trade policy changes, the landscape has become increasingly complex. Since President Trump introduced his America First Trade Policy on his first day in office, the speed of tariff actions has only accelerated. Below are the key takeaways from the most recent updates, including the past 24 hours.

U.S. Tariffs on Goods from Canada and Mexico

As of 12:01 am on Tuesday, March 4, 2025, the U.S. has imposed 25% tariffs on all goods from Canada and Mexico following a 30-day negotiation window. These tariffs are intended to address concerns over the flow of fentanyl and illegal migration.

• Energy Imports: Canadian imports of crude oil, natural gas, refined petroleum products, coal, biofuels, and critical minerals are subject to a reduced 10% tariff.
• Exemptions: Humanitarian donations, informational materials, and personal-use items in baggage are exempt but may require declaration and classification by U.S. Customs and Border Protection (CBP).
• De Minimis Treatment: Goods eligible for de minimis entry, including postage, are temporarily exempt. However, de minimis entry will be discontinued for Canadian and Mexican imports once the Secretary of Commerce announces systems to collect tariff revenue on these entries.
• Country of Origin Rules: Goods from Canada and Mexico are determined based on rules of origin outlined in Title 19, Part 102 of the Code of Federal Regulations and the last country of substantial transformation.
• Additional Duties: These tariffs apply on top of antidumping duties, countervailing duties, and other standard duties, including those under Most Favored Nation (MFN) and preferential trade agreements.
• Duty Drawback Restrictions: Canadian and Mexican goods must be admitted into U.S. Foreign Trade Zones under privileged foreign status, meaning tariffs are payable upon entry for consumption. Certain HTSUS Chapter 98 classifications remain available, with exceptions for repairs, alterations, or processing performed in Canada or Mexico.
• Legal Authority: The tariffs are implemented under the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. § 1701 et seq.). Additional authority for Mexico comes from the National Emergency at the Southern Border (Proclamation 10886, January 20, 2025, under the National Emergencies Act, 50 U.S.C. § 1601 et seq.), which has been expanded to include the U.S.-Canada border (Executive Order 14193, February 1, 2025).

U.S. Tariffs on Goods from China

As of 12:01 am on Tuesday, March 4, 2025, all imports from China and Hong Kong are now subject to an additional 10% tariff, bringing the total tariff increase on Chinese goods to 20% since President Trump took office.

• Prior Tariff Increases: This follows a previous 10% tariff increase that applied to goods entering between February 4, 2025, and March 3, 2025.
• Cumulative Duties: These new tariffs are in addition to pre-existing tariffs imposed since 2018 under Section 301 of the Trade Act of 1974 (19 U.S.C. § 2411 et seq.), which range from 7.5% to 100%, as well as antidumping and countervailing duties.
• Exemptions: Humanitarian donations, informational materials, and personal-use items in baggage are exempt but must still be declared and classified by CBP.
• De Minimis Treatment: Temporarily exempt, though Secretary of Commerce may revoke this status in the future for Canada and Mexico.
• In-Transit Shipments: Goods that were in transit or loaded onto a vessel before February 1, 2025, and entered for consumption between February 4, 2025, and March 7, 2025, are exempt from the new tariffs.
• Country of Origin Rules: Goods from China or Hong Kong are classified based on substantial transformation.
• Duty Drawback Restrictions: Chinese and Hong Kong goods must be admitted into U.S. Foreign Trade Zones under privileged foreign status, with tariffs payable upon entry for consumption. HTSUS Chapter 98 classifications remain available, except for repairs, alterations, or processing performed in China or Hong Kong.
• Legal Authority: These tariffs are imposed under the IEEPA (50 U.S.C. § 1701 et seq.) and the National Emergency at the Southern Border (Proclamation 10886, January 20, 2025, under the National Emergencies Act, 50 U.S.C. § 1601 et seq.), which has been extended to products from China (Executive Order 14195, February 1, 2025).

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