If incoming President Donald Trump imposes 25% tariffs on all Mexican and Canadian imports, it would be deeply disruptive to business in Texas, Arizona, Michigan and southeastern states with major auto manufacturing.
Customs duty
A customs duty is a tariff or tax which a country imposes on goods when they are transported across international borders. Customs Duties are used to protect countries' economies, residents, jobs, and environments, by limiting the flow of imported merchandise, especially restricted and prohibited goods, into the country. The Customs duty rate is a percentage determined by the value of the article purchased in the foreign country and not based on quality, size, or weight. U.S. customs duties are listed in the Harmonized Tariff Schedule of the United States.
If President Trump were to impose 25% tariffs on all Mexican and Canadian imports, because he believes those countries are not doing enough to stop migration and drug trafficking, no industry would be hurt more than the auto industry.
Brandon Chen, who took the April 2022 customs broker license exam, appealed the final results of his exam to the Court of International Trade, contesting 11 questions that CBP denied him credit for. Filing a complaint at the trade court on Nov. 25, Chen noted that he is only two correct answers away from a passing score of 75% (Brandon Chen v. U.S., CIT # 24-00208).
Customs brokers expressed concern about a 25% tariff on Mexico and Canada and a 10% additional tariff on China that President-elect Donald Trump announced in a Nov. 25 Truth Social post, citing uncertainties about how U.S. importers would be able to afford bond stacking and if they would be liable financially for the imports, among other issues.
President-elect Donald Trump will most likely either turn to the International Emergency Economic Powers Act (IEEPA) or Section 301 of the Trade Act of 1974 to impose his recently announced tariffs on Canada, Mexico and China, said trade lawyers interviewed by Trade Law Daily. Though much remains unknown about how Trump will impose these tariffs, the president-elect may turn to the two broad statutes to impose the tariffs to accomplish his stated goals of curbing the flow of migrants and fentanyl into the U.S.
CBP issued the following releases on commercial trade and related matters:
Todd Owen, who served as executive assistant commissioner for field operations at CBP for about five years before retiring in 2020, argued that hundreds of millions of dollars for technology upgrades, and staffing expansions, would be more helpful to catch contraband in the small package environment than removing Chinese goods or other restrictions.
Members of the House Ways and Means Committee majority, who will lead the extension or expansion of the first Trump term income tax cuts, are expressing some hesitancy about using tariffs as a pay-for.
The following lawsuits were filed at the Court of International Trade during the week of Nov. 11-17:
The U.S.-China Economic and Security Review Commission, in its annual report to Congress, said that ending de minimis for all e-commerce is one of its top 10 recommendations, and said that if Congress passes such a law, it should provide CBP adequate resources to implement and enforce the change.