Tariffs on U.S. Imports from Canada and Mexico Postponed 30 Days

February 4, 2025
Since our last post on 2/3/25 announcing Trump’s new tariffs on China, Mexico, and Canada, there have been developments shippers need to be aware of.
The following summary is sourced from National Customs Brokers & Forwarders Association of America, Inc.’s Legislative Advisor, Nicole Bivens Collinson, of the law firm Sandler, Travis & Rosenberg, P.A.
- We should anticipate seeing a revised Executive Order for Canada and Mexico announcing the delayed potential effective date as March 1. We should also see a revised Federal Register notice for Canada with the same delayed effective date. However, for China, we can provide the following additional information:
- The 10% tariffs will apply to “products of China and Hong Kong” and will be entered using HTSUS 9903.01.20. The definition of “products of China” now includes products of Hong Kong. The standard for determining the origin of the good is substantial transformation.
- These tariffs will be in addition to the normal tariff rate, plus the section 301 additional duty, plus any antidumping/countervailing duty (ADD/CVD) assessment, if applicable. So a good that is subject to a 8% normal rate of duty and a 7.5% section 301 duty rate and a 100% ADD will now pay 8 + 7.5 +100 + 10 = 125.5% total duties.
- Section 301 exclusions and MTB duty suspensions/reductions subject to 10% tariffs. Goods that may have gotten an exclusion from the section 301 tariffs must still pay these additional tariffs. Goods eligible for duty exemption/reduction under HTSUS Heading 9902 (e.g. Miscellaneous Trade Bill) must also pay these 10% tariffs.
- Section 321 Denied to China/HK goods. Section 321 (de minimis under $800) is restricted and all “products of China and Hong Kong” are prohibited from entering the US as a de minimis entry. Entry can be made for the goods, but a formal or informal entry is required. Goods that enter the US via international mail will require a formal entry.
- No drawback is allowed for these tariffs. Duty drawback is allowed for other eligible duties paid.
- Products Excluded from Additional 10% tariff. The additional 10% duty will not apply to:
- Goods that are for personal use.
- Goods entered under Chapter 98 HTSUS including:
- 9802.00.40 or 9802.00.50 (repairs/alterations) tariffs apply on value added in China and Hong Kong
- 9802.00.60 (metal articles processed abroad) tariffs apply on value added in China and Hong Kong
- 9802.00.80 (assembly of US components) tariffs apply on value added in China and Hong Kong
- 9801 goods exported from the US and returned from China and Hong Kong not subject (even if China and Hong Kong origin)
- Other Chapter 98 goods are excluded
- Donations of food, clothing and medicine intended to relieve human suffering (claim HTSUS 9903.01.21 for the exemption)
- Merely informational materials (claim HTSUS 9903.01.22 for the exemption)
- Goods In Transit Excluded until March 7 if:
- Goods loaded on a vessel or in transit on the final mode of transport prior to 12:01 a.m. Eastern Time (ET) on Feb. 1, 2025, even if they are entered or withdrawn from warehouse for consumption after Feb. 4 will not pay the 10% tariffs, but only until 12:01 a.m. ET on March 7. Entry after that date will require payment of the duties.
- Claim HTSUS 9903.01.23 for the exemption
- FTZ Goods
- Products of China and Hong Kong admitted to an FTZ after 12:01 ET on Feb. 4 must be admitted in privileged foreign status. Upon entry for consumption into the US, they will be subject to the rate of duty in effect at the time of admission into the zone which includes the 10% duty.
- Goods eligible for admission to an FTZ under domestic status are exempt from the tariffs