Trade Update: Navigating Trump Administration Tariffs

The Trump Administration has implemented broad and sweeping sector - and country-based tariffs since the beginning of 2025, with an additional global tariff regime anticipated to be announced on April 2, 2025. As of the writing of this article, these tariff actions include the following:

• 25 percent tariffs on most Canadian products effective as of March 4, 2025, with a pause on goods compliant with the U.S.-Mexico-Canada Agreement (“USMCA”) through April 2, 2025;
• 25 percent tariffs on most Mexican products effective as of March 4, 2025, with a pause on goods compliant with the USMCA through April 2, 2025;
• 20 percent tariffs on most products of China and Hong Kong effective as of March 4, 2025;
• 25 percent tariffs on global imports of steel, aluminum, and certain steel and aluminum derivative articles effective as of March 12, 2025;
• 25 percent tariffs on all goods from any country that has been determined to import Venezuelan oil, whether directly from Venezuela or indirectly through third parties, effective April 2, 2025; and
• 25 percent tariffs on all imported passenger vehicles and light trucks, as well as key automobile parts, effective April 3, 2025.

Each of these tariff programs are generally distinct and intended to be cumulative where multiple regimes apply to a particular imported product. As global trade tensions continue to rise and many countries have already begun to introduce retaliatory tariffs on the U.S., it will be critical to monitor how increased duty rates will impact your company’s cross-border transaction activity, as well as to develop practical supply chain strategies to mitigate the impact of these fluid and dynamic trade disputes. Additional background on each of these tariff regimes is included below.

I. Targeted IEEPA Tariffs

On February 1, 2025, pursuant to the International Emergency Economic Powers Act (“IEEPA”), the Trump Administration originally announced new 25 percent tariffs on nearly all imports from Mexico and Canada (except for certain energy products from Canada, subject to a 10 percent duty), as well as additional 10 percent tariffs on nearly all imports from China. While the 10 percent tariffs on goods from China went into effect on February 4, 2025, the proposed tariffs on Mexico and Canada were initially suspended for 30 days. President Trump subsequently announced on March 3, 2025 that he is proceeding with the 25 percent IEEPA tariffs on Canada and Mexico, in response to outstanding national security concerns associated with both illegal immigration and drug trafficking at the northern and southern borders. In addition, President Trump issued an Executive Order to double the original 10 percent IEEPA tariffs on China to 20 percent.

The Administration then announced a temporary pause on automobile tariffs on Mexico and Canada for one month on March 5, and subsequently on March 6 announced an additional temporary pause on USMCA-compliant products through April 2, 2025 – when additional announcements on the Trump Administration’s “reciprocal tariff” regime are anticipated. In the interim, U.S. Customs and Border Protection (“CBP”) is continuing to update its Cargo Systems Messaging Service with related guidance implementing the Administration’s tariff-related Executive Orders.

On March 24, 2025, the Trump Administration implemented a so-called “secondary tariff” regime under IEEPA, imposing 25 percent tariffs on all goods from any country that has been determined to import Venezuelan oil, whether directly from Venezuela or indirectly through third parties, effective April 2, 2025. Such tariffs will lapse one year after a country ceases importing Venezuelan oil—or sooner if officials deem it appropriate.

A brief summary of current IEEPA tariff impacts is included below.

• Canada
  • IEEPA 25% Tariff: CBP announced on March 3, 2025 that all goods that are the product of Canada (except those identified below) that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on March 4, 2025, will be subject to an additional ad valorem duty of 25 percent. (Classified in U.S. Harmonized Tariff Schedule (“HTSUS”) 9903.01.10). 
  • IEEPA 10% Tariff: In the same guidance, CBP announced the following products of Canada will be subject to a 10 percent ad valorem duty effective March 4, 2025: 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). (Classified in HTSUS 9903.01.13).
  • USMCA Compliant Goods – Temporary Pause: On March 6, 2025, the Administration announced that tariffs on all products of Canada that comply with the USMCA free trade agreement will be paused until April 2, 2025. 
• Mexico
  • IEEPA 25% Tariff: CBP announced on March 3, 2025 that all goods that are the product of Mexico (except those identified below) that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on March 4, 2025, will be subject to an additional ad valorem duty of 25 percent. (Classified in HTSUS 9903.01.01).
  • USMCA Compliant Goods – Temporary Pause: On March 6, 2025, the Administration announced that tariffs on all products of Mexico that comply with the USMCA free trade agreement will be paused until April 2, 2025. 
• Canada and Mexico Tariff Exclusions
  • Products for personal use included in accompanied baggage of persons arriving in the United States;
  • Donations of food, clothing and medicine intended to relieve human suffering; 
  • Certain informational materials; and
  • Certain goods entered under HTSUS Chapter 98 (e.g., HTSUS 9802.00.40, 9802.00.50, and 9802.00.60, where additional duties apply to the value of repairs, alterations, or processing performed in Mexico or Canada).
• Foreign Trade Zones, Drawback, and De Minimis
  • Products of Canada or Mexico admitted to a foreign trade zone (“FTZ”) after 12:01 a.m. ET on March 4 subject to IEEPA tariffs must be admitted as privileged foreign status. Upon entry for consumption into the U.S., they will be subject to the rate of duty in effect at the time of admission into the zone. 
  • Goods eligible for admission to an FTZ under domestic status (as defined in 19 CFR 146.43) are exempt from the tariffs.
  • Duty drawback is not available for impacted goods from Canada or Mexico.
  • The duty-free de minimis exemption under 19 U.S.C. 1321 continues to be available until the Department of Commerce establishes a system to collect such tariffs. 
• China
  • IEEPA 20% Tariff: President Trump originally imposed a 10 percent additional IEEPA tariff effective February 4, 2025 applicable to all imported articles that are the products of China and Hong Kong. This Order was amended March 3, 2025 and CBP announced that an additional 20 percent IEEPA tariff will apply to all imported articles that are the products of China and Hong Kong effective March 4, 2025. 
  • Section 301 Tariffs: The 20 percent IEEPA tariffs apply in addition to any general rate of duty, Section 301 duty, or Section 232 duty that may be applicable to articles of Chinese origin. A full list of Section 301 China tariff classifications can be found on the HTSUS website administered by the U.S. International Trade Commission. 
• Venezuelan Oil Importers
  • IEEPA 25% Tariff: On March 24, 2025, President Trump issued an Executive Order and Fact Sheet authorizing the imposition of 25 percent tariffs on all goods from any country that imports Venezuelan oil, whether directly from Venezuela or indirectly through third parties – effective as of April 2, 2025. The term “Venezuelan oil” means crude oil or petroleum products extracted, refined, or exported from Venezuela, regardless of the nationality of the entity involved in the production or sale of such crude oil or petroleum products. The term “indirectly” includes purchases of Venezuelan oil through intermediaries or third countries where the origin of the oil can reasonably be traced to Venezuela.

II. Section 232 National Security Tariffs

i. Steel and Aluminum

In February 2025, the Trump Administration announced updated 25 percent tariffs on steel and aluminum products pursuant to Section 232 of the Trade Expansion Act of 1962 (“Section 232”), targeting all countries. The updated Section 232 tariffs went into effect as of March 12, 2025 – and CBP has since published guidance on impacted HTS classifications for steel, aluminum, and related derivative products. A summary of key information from these Proclamations is included below:

• Blanket 25% tariffs on imports of steel, aluminum, and certain steel and aluminum derivative articles effective as of March 12, 2025.
• For newly covered derivative articles that are outside of HTS Chapter 73 (steel) and Chapter 76 (aluminum), the additional duty only applies to the value of the steel or aluminum content of the derivative product. 
• Importers are required to report to CBP the primary country of smelt, secondary country of smelt, and country of cast on imports of all aluminum articles subject to the aluminum and aluminum derivatives Section 232 measures.
• Rescission of previous country-specific Section 232 exclusions and tariff rate quotas implemented since 2018.
• Recission of Section 232 product-specific exclusion process administered by the Department of Commerce. Previously granted product-specific exclusions remain in effect until they expire or the approved quantity has been exhausted.
• CBP has issued additional guidance on calculating steel and aluminum derivative tariffs on its Section 232 Frequently Asked Questions page. 
• CBP is directed to prioritize monitoring of steel and aluminum imports to discover misclassifications of merchandise that result in non-payment of the Section 232 duties, and to assess maximum monetary penalties against importers determined to have misclassified such articles.

ii. Automobiles and Related Parts

On March 26, 2025, President Trump issued a new Section 232 proclamation imposing 25 percent tariffs effective April 3, 2025 on imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary. Importers of covered Mexican and Canadian automobiles under the USMCA will be given the opportunity to certify their U.S. content, and USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with CBP, establishes a process to apply tariffs to their non-U.S. content.

iii. Pending Section 232 Investigations

On February 25, 2025 and March 1, 2025, the White House announced two new Section 232 investigations into (i) copper, and (ii) timber and lumber imports – which may result in additional tariff actions.

III. Supply Chain Strategies and Key Takeaways

Tariffs have been and will continue to be a focal point of the Trump Administration’s global trade policy, whether in pursuit of economic security, national security, or as a broader negotiation tactic. Further, the Administration has made it clear that a broad reciprocal tariff regime will be announced on April 2, 2025 – the scope of which is currently unclear, but which is anticipated to be both sector-based (e.g., agriculture, pharmaceuticals, semiconductors, and advanced computing equipment) as well as country-based. While the Administration originally announced that such reciprocal tariffs would be imposed in a manner equivalent to third-country treatment of U.S.-origin goods, President Trump has recently indicated that the percentage ultimately imposed may be lower than what the Administration assesses is the total burden of third-country tariffs and non-tariff barriers. 

That being said, the tariff landscape is evolving rapidly and subject to constant evolution and change – and accordingly, companies and importers should take the following steps as soon as possible:

• Evaluate your supply chain and diversify suppliers to mitigate tariff costs;
• Reevaluate product designs and manufacturing operations to establish favorable country(ies) of origin;
• Negotiate tariff cost-sharing provisions in supply and distribution contracts to mitigate effect of increased tariffs; 
• For outbound products, identify potential new costs to customers and distributors associated with retaliatory tariffs implemented by third-countries;
• Closely monitor evolving negotiations and regulatory changes for new exclusions, exemptions, or carve-outs that may impact your cross-border transaction activity;
• Utilize free trade agreements or free trade zones where practicable; and
• Consistently audit and document HTS classifications and country of origin determinations for imported goods to ensure customs compliance, timely duty payments, and efficient responses to requests for information issued by CBP.

If you have any questions regarding the application of new U.S. tariffs or trade policy matters, please contact a member of Womble Bond Dickinson’s International Trade and National Security practice.