Executive Briefing #4: US Tariff Realities – Essential Updates for Importers

Up and up the Tariffs Go

In case you haven’t been with us through previous Executive Briefings, we’re here to bring you up-to-date on the latest announcements and fresh interpretations of US tariff policies. No fluff—just the latest intel on tariff shifts you need to know to stay ahead in importing.

(A)   Countries

First, we update you on the three countries so far affected by the new import tariffs: Canada, Mexico, and China.

Canada

In the first round of new tariffs, President Trump imposed a 25% tariff on the majority of imports from Canada, with a 10% tariff on energy products. However, implementation has proved to be disconnected as we can see here –

·         February 1:        Tariffs announced, with -

·         February 4:        Implementation date, but -

·         February 4:        Tariffs postponed by 30 days.

·         March 4:              Tariffs to take effect, but -

·         March 4:              Once again implementation delayed to April 2,

This last delay applies only to goods covered under USMCA, meaning that over 60% of Canada’s exports are now subject to the 25% tariff.

Note that Canada has not been idle, having imposed a first wave of retaliatory tariffs on $30 billion worth of US goods effective March 4. A second wave of retaliatory tariffs on products worth $125 billion has been postponed until April 2.

Mexico

The original 25% tariff, announced to take effect on February 4, was suspended for 30 days—just as with Canada.

After this period, the tariff was imposed and, like Canada, delayed until April 2 for goods that qualify under USMCA. This affects about half of US imports from Mexico, meaning that half of the imports are now subject to the 25% tariff.

Mexico has indicated that it will retaliate, but no detailed announcements have been made yet.

China

China was hit with a 10% import tariff across all goods as of February 4, with an additional 10% imposed on March 4.

China has retaliated with tariffs on some US agricultural products—such as chicken, wheat, corn, and cotton—and imposed a 10% tariff on soybeans, pork, beef, and other products.

(B)   Products

Next, we look at the two product categories impacted: steel and aluminium.

Steel and Aluminium

The 25% tariff announced in February on steel and aluminium takes effect on March 12, 2025. This global tariff is the first new tariff to impact countries outside of Canada, Mexico, and China.

It is important to note that if an auto or auto component contains steel or aluminium, then as of March 12 the steel or aluminium will be subject to the 25% tariff—even though the broader tariff has been suspended until April 2. In instances like this, importers need to proceed with caution and seek fully qualified advice, as the tariffs are being implemented under executive orders that do not provide all the necessary details for interpreting every case.

This point is crucial: the rapid implementation of these tariffs creates uncertainty, making it difficult for importers to know exactly what they must comply with.

(C)   Future targets

As of today, there is no specific information regarding other countries or product categories.

However, importers should have in their sights –

·        Retaliatory tariffs have been indicated on a broad basis, to take effect on April 2. India has been highlighted in this context.

·        EU has had airtime from Trump, but nothing specific has been put on the table yet.

·        Other products categories have been highlighted, especially from China.

·        On China generally, there has been no mention of further tariffs despite the election campaign indicating 60% as a target.

(D)   Commentary on Developments

It may seem that the mainstream media is less focused on tariffs, but this is simply because interest has shifted elsewhere.

From a Canadian perspective, it is clear that neither the government nor the public intends to simply absorb the US tariffs.

Whether it is the government responding with their own tariffs on targeted US products, or consumers shifting buying habits to focus on Canadian-made products, or purchasing products from other countries, we will need to watch how this situation unfolds.

Mexico appears more reserved. There has been no retaliation yet, although President Steinbaum has indicated that it is forthcoming.

It seems that Mexico is responding to Trump’s arguments that more must be done about the trafficking of people and fentanyl from Mexico into the US.

China is taking a more robust approach, although the tariffs China has announced on American products are at a considerably lower rate than those imposed by the US.

In the discussion of the new tariffs—10% in both February and March—few in the mainstream media have referenced products already subject to a 25% import duty from previous administrations. This stacking is going somewhat under the radar.

(E)    Effect on Prices and Inflation

Within the US, more economists are predicting that tariffs will drive up inflation. Opinions on how high inflation might go vary, although higher predictions are becoming more common.

So far, hard evidence is thin. Some major retailers have indicated that they expect to raise prices to cover the cost of the new tariffs, but a majority of businesses appear to be keeping their heads down.

Globally, there is concern that these tariffs will dampen trade. Countries like Dubai are exploring whether new markets could compensate for reduced US trade. Countries like Australia and New Zealand, as well as Europe are cautiously assessing the potential economic impact.

Business leaders are discussing strategies to mitigate what is likely to be a significant import tariff on one of the world’s major markets, but few have expressed confidence in the near future.

(F)    A word of caution

Quick heads-up: Tariff details are evolving rapidly. While we've outlined the current landscape as accurately as possible, make sure to verify the specifics and get personalized advice for your unique circumstances.