4 minute read | February.04.2025
The Trump administration is imposing, beyond existing tariff levels:
The new duties on imports from China will be in addition to substantial other duties (e.g., “Section 301” tariffs). Most imports from Canada and Mexico have been duty-free under the U.S.-Mexico-Canada Agreement. It seems difficult to reconcile the new tariffs with zero or lower tariff requirements of that and other trade agreements.
The “Section 321” de minimis tariff exemption for low-value imports will not apply to imports covered by the new duties.
In general, the new duties on Chinese imports are to apply as of today, February 4, 2025. President Trump informally announced that the new duties on Mexican and Canadian imports are suspended for a month. Subject to an importer certification requirement, shipments that were in transit to the United States before February 1 will be exempt from the new duties.
The new duties are to generally cover all merchandise that originated in Canada, Mexico or China. The new duties will not apply to imports of items that are exempt from IEEPA (see below), such as certain donations, personal luggage and informational materials.
The President is implementing the new duties through executive orders purportedly authorized by International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06 (IEEPA). Subject to conditions, IEEPA authorizes the President to regulate importation of any property in which any foreign country or a national thereof has an interest.
IEEPA authorities may be exercised only to “deal with an[] unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.” Here, the President has declared an emergency with respect to the U.S. southern and northern borders and the three countries’ alleged failure to prevent drug-related activity that affects the United States.
No President has purported to rely on IEEPA authority to impose duties on imports, and this action is likely to meet one or more court challenges in the near future. At the same time, in 1971, President Nixon declared a national emergency regarding adverse U.S. balance of payments circumstances and imposed a 10% supplemental duty on U.S. imports. In facing subsequent court challenges, the Nixon Administration purported to rely on the President’s authority to regulate imports during a national emergency under the Trading with the Enemy Act (TWEA). A U.S. court of appeals agreed that TWEA authorized the balance-of-payments tariffs.
Canada, Mexico and China have announced retaliatory action.