YESTERDAY’S U.S. TARIFF ACTIONS: On 4 March, the Trump Administration implemented the 25% tariffs on U.S. imports from Canada and Mexico, and increased U.S. tariffs on imports from China another 10%. Tariff action against Canada and Mexico was initially postponed by 30 days in February. President Trump implemented the tariffs citing all three countries have not done enough to curb the flow of illegal drugs and/or immigrants into the United States.
25% tariff on imports from Canada and Mexico
- $191 M estimated annual tariff costs on imports of $764.3 M from Canada
- $20 M estimated annual tariff costs on imports of $81.7 M from Mexico
- Drawback, or refund, of duties paid on U.S. imports of inputs from CA and MX incorporated into goods exported from the United States will not be permitted.
- Amendments to the Canada and Mexico Executive Orders allow for the de-minimis duty exemption for low value goods until “adequate systems” are in place to collect tariff revenue.
- Secretary Lutnick is suggesting that tariffs could be modified in the near future.
20% tariff on imports from China (10% in February and 10% additional 4 March)
- $71 M additional tariff costs on imports of $353.1 M from China
- Duty drawback is not permitted on the additional tariffs.
- De-minimis duty exemption for low value goods is allowed until “adequate systems” are in place to collect tariff revenue.
YESTERDAY’S RETALIATORY TARIFF ACTIONS: In response to the new tariffs, Canada and China initiated targeted retaliatory trade and tariff action against specific U.S. exports and U.S. companies.
Canada’s Retaliatory Action
- Tranche 1: Effective 4 March, Canada implemented retaliatory tariffs of 25% on specific products of U.S. origin.
- No tariff lines targeting U.S.-manufactured food processing and packaging machinery is targeted by Canada’s first retaliatory tariff action. Please see earlier alert on 4 February (attached for reference).
- Please see the one-page process for requesting remission of tariffs that apply on certain goods from the U.S. to Canada. The site includes the template and required information that must be provided to Canada’s Ministry of Finance, and the email address to submit: [email protected] with Subject line: “U.S. Remission”. This may be one way for PMMI members with manufacturing operations in Canada to potentially mitigate any new tariffs applied on U.S.-sourced parts, inputs, and materials.
- Tranche 2: By 25 March, Canada has indicated implementation of additional retaliatory tariffs if President Trump does not remove 25% U.S. tariffs. The additional retaliatory tariff action does not target PMMI machinery tariff lines. However, the scope is quite broad and may include materials and inputs sourced from the United States (e.g., steel under Chapter 72).
- Comments on Canada’s tariff measures, including the proposed tranche 2, can be submitted online or by emailing [email protected] by 25 March.
Mexico’s Retaliatory Action
- Mexico’s President Sheinbaum says that Mexico will announce its countermeasures on 9 March which would include retaliatory tariffs.
China’s Retaliatory Action
- As reported on 4 February, China implemented 10% retaliatory tariffs on certain U.S. goods, including machinery under tariff sub-heading 8438.60, “Machinery for the industrial preparation of fruits, nuts or vegetables (excluding cooking and other heating appliances, refrigerating or freezing equipment and machinery for the sorting or grading of fruit and vegetables”.
- Effective 10 March, China will implement new retaliatory tariffs of 10% or 15% on specific products of U.S. origin. These new tariffs will not impact PMMI members’ U.S. exports as no tariff codes relevant to PMMI machinery were identified.
- China has also taken additional retaliatory trade action that does not appear to impact PMMI members as it targets primarily tech companies.
- A lawsuit has also been filed at the World Trade Organization by China in response to the new U.S. tariffs.
POTENTIAL U.S. TARIFF ACTIONS: President Trump yesterday announced on Truth Social that he will impose tariffs on “external” agricultural products starting 2 April. President Trump did not provide details on products scope or level of tariffs, but these actions are not expected to impact PMMI members.
