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Husch Blackwell sent an update on this development on February 3. Read our legal update to discover the latest regarding President Trump’s tariffs on Canada, Mexico, and China.

On February 1, 2025, President Trump signed three Executive Orders (“EO”) under Section 1702(a)(1)(B) of the International Emergency Economic Powers Act of 1977(“IEEPA”)declaring a national emergency due to increased immigration and fentanyl flows into the United States and thereby imposing additional tariffs on goods from Canada, Mexico, and China to hold the countries accountable. The linked order which is specific to goods from Canada and crossing the northern border goes into effect at 12:01am on Tuesday, February 4, 2025, but grandfathers imports that were already en route and loaded as of 12:01 am February 1, 2025, that are accompanied by a certification from U.S. Customs and Border Protection.

  • EO on Canada: “Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border”
  • EO on Mexico: “Imposing Duties to Address the Situation at the Southern Border”
  • EO on China: “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China”

The Executive Orders for the tariffs on Mexico and China are not yet available. This alert will be updated as soon as they become publicly available.

Impacts of the EOs on Imports from Canada, Mexico, and China

  1. Products from Canada Subject to Tariffs
  • An additional 25% tariff will be applied to any already applicable duties, fees or charges.
  • An additional 10% tariff will be applied to “energy or energy resources” which is currently defined as the following: crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, hydropower, and critical minerals.
  • Products Covered: the EO applies to “[a]ll articles that are products of Canada” which will be defined by the Federal Register Notice. Once that Federal Register Notice is available, Husch Blackwell will provide an updated list of the products covered; however, reporting suggests that this definition will include those products with Canada as the Country of Origin, including USMCA goods. 
  • Products from Mexico Subject to Tariffs
  • An additional 25% tariff will be applied to any already applicable duties, fees or charges.
  • Products from China Subject to Tariffs
  • An additional 10% tariff will be applied to any already applicable duties, fees or charges.  This will be in addition also to any existing Section 301 duties on specific products that have been in effect since 2018.

Duration of Tariffs

Based on the language in the EO on Canada, the new IEEPA tariffs will remain in effect until the President determines that that the Government of Canada has taken “sufficient action to alleviate the crisis” including through cooperative enforcement actions.  We anticipate the EOs on Mexico and China will have similar language.

Specific Provisions of Note

  • Duty Drawback: Duty drawback will not be available with respect to any of the additional tariffs imposed by these three orders. 
  • De Minimis Treatment: Goods subject to these additional tariffs will not be eligible for Section 321 duty-free de minimis treatment.
  • The EO on Canada directs the Secretary of Homeland Security to determine the modifications necessary to the Harmonized Tariff Schedule of the United States (“HTSUS”) to effectuate the order. The changes will be announced through a notice in the Federal Register which is not yet published.  Husch Blackwell will update this post once the Federal Register becomes available.
  • As of now, the EO on Canada does not outline any exceptions nor does it establish an exemption process.
  • The EOs contain the proviso that the President may increase, modify, or expand the scope of the tariffs if the Governments of Canada, Mexico, and China impose retaliatory tariffs.
  • The EOs also state that the Secretary of the Department of Homeland Security, along with Treasury and other relevant agencies are required to submit recurring and final reports to Congress on the state of the national emergency declared under this order in line with the specific provisions of IEEPA.

Anticipated Retaliatory Action from Trading Partners

In response, Canada has announced that it will impose retaliatory tariffs of 25% on approximately $155 Billion of U.S. imports into Canada which includes a wide range of consumer goods.  Canada has also intimated that it believes the imposition of these new tariffs are unlawful under the United States-Mexico-Canada Free Trade Agreement (“USMCA”).

Mexico’s president also ordered retaliatory tariffs stating in an announcement on X that “[w]e categorically reject the White House’s slander that the Mexican government has alliances with criminal organizations, as well as any intention of meddling in our territory,” and has told her Economic Secretary to impose retaliatory tariffs and other measure to defend Mexico’s interests. 

 It is reported that China is preparing to file a complaint against the United States at the World Trade Organization (“WTO”) in response to the additional 10% tariffs on goods from China. China’s Ministry of Commerce also stated additional countermeasures would be implemented, but did not elaborate on what those measures would be.

Background on IEEPA

IEEPA grants the President sweeping authority to address any “unusual or extraordinary threat to national security, foreign policy, or economy of the United States” with respect to which the President has declared an emergency. This includes regulating or prohibiting the importation of any property in which “any country or foreign national thereof has an interest.”  

IEEPA requires the President to “consult” with Congress “in every possible instance” before taking action as well as during the pendency of the emergency. IEEPA also mandates that the President submit a report to Congress “immediately” after taking action. This report generally details the nature of the emergency, the rationale for the chosen response, and the foreign entities affected. The requirements to consult with and report to Congress, while present, are not viewed as being burdensome and are unlikely to constrain the exercise of executive action.

The IEEPA provides wide latitude to a President to act in times of national emergency with relatively few procedural requirements. This in contrast to the more stringent procedural requirements of Sections 301 of the Trade Act of 1974 and under Section 232 of the Trade Expansion Act of 1962.

Next Steps

We anticipate that all three of these EOs will likely be challenged in U.S. courts, particularly given the ambiguity of terms like “national emergency” and “unusual and extraordinary threat” to U.S. “national security, foreign policy, or economy.” However, the statute (and the Constitution) grant the President broad discretion in these areas, and courts have generally deferred to the President in matters of national security and foreign policy. Businesses impacted by the latest round of import tariffs or actions of trading partners are advised to review their supply chain and consult with experts to evaluate mitigation strategies.

The Husch Blackwell International Trade and Supply Chain Team is continuing to monitor these events and will provide updates as more information becomes available.