Just two days after new 25 percent tariffs were imposed on imports from Canada and Mexico, the White House announced that those tariffs will be suspended for all such imports that qualify for duty-free treatment under the U.S.-Mexico-Canada Agreement.
Late on March 6 the White House issued separate executive orders exempting articles that are entered free of duty as a good of Canada or Mexico “under the terms of general note 11 to the HTSUS, including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99” as related to the USMCA.
Further, these EOs lower from 25 percent to 10 percent the additional tariff on imports of potash from Canada or Mexico that do not qualify under the USMCA.
These changes are to take effect for covered goods entered or withdrawn from warehouse for consumption on or after 12:01 am EST on March 7. While administration officials have said the tariff suspensions are only valid until April 2, the EOs include no termination date for them.
According to press reports, the tariff suspension will cover about half of imports from Mexico and about 38 percent from Canada. It was announced following a series of related remarks from administration officials over the previous 24 hours. White House press secretary Karoline Leavitt first said March 5 that President Trump had agreed to a one-month exemption for automobiles. Commerce Secretary Howard Lutnick followed early on March 6 by saying the exemption would likely cover “all USMCA-compliant goods and services” from both countries. Trump subsequently confirmed that via social media, sparing only Mexico at first and then Canada a few hours later, before issuing the EOs making the changes official.
Leavitt said the decision to exempt automobiles came after a direct appeal from automaker CEOs, and the EOs themselves cite the need to “minimize disruption to the United States automotive industry and automotive workers” as justification for the tariff suspensions, even though they apply to all USMCA-qualifying goods. Press reports suggest that similar lobbying efforts by farm groups resulted in the lowering of the tariff for potash, an ingredient of the fertilizer farmers need for the upcoming growing season. According to Leavitt, Trump is “open to hearing about additional exemptions” as well.
To avoid increased duty liability during the one-month tariff suspension period, importers should act now to ensure that their imports claiming preferential treatment under USMCA meet the applicable requirements. ST&R has substantial experience helping businesses conduct such reviews in a comprehensive and timely manner. For more information, please contact tariffs@strtrade.com.
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