President Trump has invoked authority principally under the International Emergency Economic Powers Act (IEEPA). However, by referencing Section 301 of the Trade Act of 1974, the President is imposing tariffs on Canada and China, effective at 12:01 AM Eastern Time (ET) on February 4. Note: If you can certify that your goods were on the vessel or in transit on the final mode of transport by 12:01 a.m. ET on February 1, and they are entered for consumption or withdrawn from the warehouse for consumption on or after 12:01 a.m. ET on February 4, those goods will NOT be subject to the tariffs.

• President Trump and Mexico’s President Claudia Sheinbaum have reached an agreement to delay tariffs on Mexico for one month.
• President Trump and Canadian Prime Minister Justin Trudeau are scheduled to meet today at 3 p.m. 

The tariffs will be 25% on all products of Canada, except that only a 10% tariff will be imposed on Canadian “energy or energy resources.” The term “energy” or “energy resources” means crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3).

The tariffs will be 10% on all products of China. These tariffs will be in addition to any other applicable duties, fees, and charges.

The term “products of” Canada and China will be defined in a separate Federal Register notice by the Department of Homeland Security, which will create additional HTSUS provisions to apply these tariffs.

• There will be no duty drawback allowed for the additional duties paid.
• There will be NO section 321/de minimis (less than $800) shipments allowed for products of Canada, Mexico, or China.
• There is no mention of an exclusion process.

We are awaiting clarification regarding whether the duty-free base rate for goods qualifying for FTA preference will be impacted, and whether Chapter 98 goods are excluded from the additional tariffs.

Canada has already announced retaliatory tariffs of 25% on $155 billion of U.S. goods. This includes tariffs on $30 billion worth of goods, which will go into effect on February 4, with the remaining tariffs to be implemented in 21 days, allowing Canadian companies time to adjust and ship goods. We may also see the U.S. 25% tariffs on Canadian imports increase again, as the executive order states that if a country retaliates against the U.S., the U.S. may increase or revise the tariffs.

Customs and Border Protection (CBP) notified the trade community on the evening of February 2 that a Federal Register Notice will be published to provide more specifics, including further details on relevant updates to the HTSUS. The agency also stated that it will provide additional technical updates regarding duty-free de minimis treatment via CSMS following the publication of the Federal Register notice. CBP added, “We understand that there will be many questions regarding the implementation of these tariffs, and we are committed to clear and timely communication. We will provide significant updates as we receive them.”

RIM will continue to closely monitor this evolving situation and provide updates as necessary. Please reach out to your RIM representative should you have any further questions.