This blog post covers trade developments occurring during the seventh week of the new Trump Administration. It covers events occurring through 12:00 pm Eastern time on Friday, March 7.

Import-Related Developments

IEEPA Tariffs on Canada and Mexico Take Effect March 4 but Modified Two Days Later

The tariffs imposed by President Trump on Canada and Mexico under the International Emergency Economic Powers Act of 1977 (IEEPA) went into effect on March 4, 2025.  Our initial posting on this development can be found here. U.S. Customs and Border Protection (Customs) published guidance in the Federal Register on March 6 for imports from Canada and Mexico.

Two days later, the President modified his prior Executive Orders to exempt goods from Canada and Mexico that qualify for preferential treatment under the United States-Mexico-Canada Free Trade Agreement (USMCA).  See our initial post here.  

Customs subsequently issued guidance and applicable HTSUS codes for Canada and Mexico.

Current Status:

Qualifying Products Exempted: Effective March 7, goods that qualify for preferential treatment under USMCA will not be subject to the IEEPA Tariffs.  The exemption is not retroactive.

Non qualifying products:  Products that do not quality for USMCA treatment will remain subject to the IEEPA tariffs imposed on imports from Canada and Mexico:

• Certain energy imports are subject to an IEEPA tariff of 10 percent effective March 4
• All other imports subject to an IEEPA tariff of 25 percent effective March 4
• Non-USMCA qualifying Potash will be subject to an IEEPA tariff of 10 percent effective March 7.
• De minimis imports from Canada and Mexico remain eligible for duty-free treatment until the U.S. Department of Commerce notifies the President that adequate systems are in place to process and collect tariffs on such imports.

Retaliation by Canada and Mexico:

• Canada:  Canada announced retaliatory measures against imports from the United States. Canada announced 25% tariffs on $30 billion worth of U.S. products effective Tuesday, March 4.  Canada also issued a notice to of its intent to implement a second round of tariffs on another $125 billion dollars’ worth of U.S. products and is seeking public comment by March 25, 2025.  See our initial post here for more information.

• Mexico:  Mexico is also expected to retaliate against the United States, but the nature of that retaliation has not yet been announced. Reports indicate that Mexico will announce tariff and non-tariff measures by Sunday, March 9.

IEEPA Tariffs on China Increased to 20% China Retaliation

On March 3, 2025, the President issued an Executive Order increasing the previously announced 10% duty on imports from China to 20%.   See our original post here.   Customs issued a notice providing guidance on the implementation of the additional tariff on China and Hong Kong, which can be found here. The notice also provides the tariff subheadings under Chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) that importers will need to declare for imports from China entered on or after 12:01 a.m. eastern standard time on March 4, 2025.  This guidance was subsequently published in the Federal Register.

China subsequently announced retaliatory tariffs on certain products imported from the United States.  For more information, see our original post here. 

Tariff Subheadings Created for Steel and Aluminum Tariffs

On March 5, 2025, the Department of Commerce (Commerce) published Federal Register notices providing modifications to the Harmonized Tariff Schedule of the United States (HTSUS) in order to implement the steel and aluminum tariffs announced by the President on February 10, 2025.  Please see our original post here for more information.

New Section 232 Investigation on Timber, Lumber, and Derivative Products

On March 1, 2025, President Trump issued an Executive Order directing Commerce to initiate a Section 232 investigation into imports of timber, lumber, and their derivative products.  Please see our original post here for more information.

Bill to Eliminate De Minimis Exemption Introduced in House

Representative Sanchez (D-CA), the ranking Democrat on the Ways and Means Trade Subcommittee has introduced a bill in the House of Representatives that would end the exemption from tariffs for de minimis entries.  The de minimis exemption allows certain low value imports to enter the United States duty-free.  The bill would immediately end de minimis treatment for packages from China with only a limited exception for goods in transit.  For other countries, the bill phases out de minimis after a four-month transition period. During the transition period the U.S. Department of Treasury would be required to develop regulations to ensure effective enforcement of the law.    

Export Controls & Sanctions

OFAC Sanctions Houthis in Yemen

On March 4, 2025, the U.S. Department of State designated Ansarallah, commonly referred to as “the Houthis,” as a Foreign Terrorist Organization (FTO). The Houthis had already been designated as a Specially Designated Global Terrorist (SDGT) on the U.S. Treasury Department’s Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) List.

Concurrent with the FTO designation, OFAC amended several Ansarallah-related general licenses to continue to allow for humanitarian-related activities in Yemen that would have otherwise been prohibited under the Foreign Terrorist Organizations Sanctions Regulations, including General License No. 22A, which authorizes the provision of certain agricultural commodities, medicine, and medical devices.  OFAC also amended previously issued general licenses in order to narrow the scope of authorized telecommunications transactions involving Ansarallah and to eliminate a previous authorization which had allowed transactions with Ansarallah related to imports or exports of refined petroleum products through ports and airports in Yemen.

Relatedly, on March 5, 2025, OFAC designated seven political and militant leaders of the Houthis as SDGTs pursuant to the counterterrorism authority Executive Order 13224 (as amended). OFAC also designated two Houthi leaders involved in smuggling Yemeni civilians under false pretenses to fight for the Russian military against Ukraine.

OFAC Revokes Chevron Authorization to Operate in Venezuela

On March 4, 2025, OFAC issued General License No. 41A to authorize Chevron Corporation (Chevron) to wind down its petroleum transactions in Venezuela with state-owned Petróleos de Venezuela, S.A. (PDVSA). General License No. 41A effectively revokes General License No. 41, which was issued under the former Biden Administration on November 26, 2022 to allow certain Chevron operations with PDVSA that would have otherwise been prohibited by OFAC sanctions. 

General License No. 41 featured an autorenewal clause which automatically renewed the license on the first day of each month. Chevron must now wind down previously authorized transactions by 12:01 a.m. eastern daylight time on April 3, 2025. Previous statements made by Secretary of State Marco Rubio suggested the Trump administration might terminate other OFAC licenses related to Venezuela, though no such revocations have been announced yet. 

On March 6, 2025, OFAC also issued General License No. 5R to authorize all transactions related to the PDVSA 2020 8.5 Percent Bond on or after July 3, 2025, that would be prohibited by the Venezuela Sanctions Regulations. OFAC General License No. 5R replaces General License No. 5Q dated November 7, 2024, which would have authorized such transactions to begin on or after March 7, 2025.

The Husch Blackwell International Trade team is monitoring developments closely and will report back with further details, including analysis of any substantive announcements made, as they emerge.