The implementation of -- and seemingly abrupt reprieve from -- 10% to 25% duties on goods imported from Canada and Mexico is causing whiplash among customs brokers.
Given that more than half of imports from Canada and Mexico don't claim USMCA preferences, trade lawyers and customs experts are expecting a sharp and rapid increase in entries that claim the preference.
An exemption for USMCA-qualifying goods from 25% tariffs on goods from Mexico will also take effect March 7, alongside the USMCA exemption for Canada, according to an executive order signed today by President Donald Trump. Like the Canada order, it also lowers the tariff for potash that doesn’t qualify for the USMCA exemption to 10%.
President Donald Trump is excluding Canadian and Mexican exports from 10% or 25% duties that began March 4, as long as those goods can qualify for USMCA benefits. The change starts at 12:01 a.m. March 7.
The President has amended the executive orders imposing 25% tariffs on all Mexican goods, 10% tariffs on Canadian energy and 25% tariffs on other Canadian imports so that any good that qualifies for USMCA preference will be able to avoid the tariff, the White House said.
An exemption for USMCA-qualifying goods from 10% and 25% tariffs on goods from Canada will take effect at 12:01 a.m. on March 7. An executive order signed by President Donald Trump exempts all goods “that are entered free of duty as a good of Canada under the terms of general note 11” of the tariff schedule from the tariffs, “including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99.”
President Trump posted on social media: "After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement. This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!"
Vehicles that meet the USMCA rules of origin will be able to enter the U.S. duty-free again, for one month, two White House spokespeople said March 5.
White House spokeswoman Karoline Leavitt told reporters that the president asked her to tell reporters that after he spoke with Detroit's Big Three automakers: "We are going to give a one-month exemption on any autos coming through USMCA. Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month, so they are not at an economic disadvantage."
From corporate giants to small companies, in farming, manufacturing and retail, Americans said tariffs on Canada and Mexico were damaging their businesses and driving up costs for customers.