IEEPA tariffs: Impact on U.S. trade
As the supply chain industry welcomes a new administration, tariffs are at the forefront of many conversations.
International Emergency Economic Powers Act (IEEPA) tariffs
The U.S. administration has utilized the International Emergency Economic Powers Act (IEEPA) to implement tariffs to imports from Canada, Mexico, and China.
Tariffs on Canada
The U.S. administration set 25% tariffs on all imports from Canada, except for energy resources, which are subject to 10% tariffs. Canada swiftly imposed retaliatory tariffs of 25% for nearly all goods from the United States going to Canada. Tariffs from both countries are set to go into effect on March 4, 2025, after a one-month pause from the initial February 4, 2025, effective date. This delay is to allow for further negotiations.
Tariffs on Mexico
The U.S. administration also imposed 25% tariffs on all imports from Mexico. These too have a current effective date of March 4, 2025, pending further discussions to reduce/eliminate them if possible.
Tariffs on China
The U.S. administration also imposed 10% tariffs on goods imported from China. These tariffs went into immediate effect on February 4, 2025. While these are less than those set for Canada and Mexico, they are in addition to the existing tariffs already in place for goods from China.
China imposed retaliatory tariffs of 15% for coal and liquified natural gas (LNG) and 10% for U.S. crude oil, agricultural machinery, large-displacement vehicles, and pickup trucks from the United States going to China, which are effective February 10, 2025.
Removal of De Minimis exemption
The U.S. administration also removed the De Minimis exemption, which previously allowed goods under $800 of value to travel into the United States tariff-free. The removal of De Minimis went into effect February 4, 2025, for goods originating in China and is currently slated to go into effect for goods originating in Mexico or Canada on March 4, 2025.
This situation remains fluid and is evolving quickly while negotiations continue.
For the most up to date information and guidance, see our client advisories.