Yesterday, President Trump temporarily paused 25% tariffs implemented Tuesday on imports from Mexico and Canada that are compliant with the U.S.-Mexico-Canada Agreement (USMCA) rules of origin until 2 April. The temporary reprieve covers only a portion of products moving into the United States from Mexico and Canada, given that about 50% of imports from Mexico are USMCA-eligible, and 38% of imports from Canada are USMCA-eligible. The Executive Order pausing tariffs for Canada includes additional product specific tariff reductions for potash and some energy products.
Canada responded by keeping in place its tranche 1 retaliation list (see alert from 5 March for information on PMMI impact, attached for reference), and postponing the implementation of tranche 2 retaliatory tariffs until 2 April (one week later from the original date of 25 March).
Mexico retaliatory action has not been published. President Sheinbaum is still scheduled to release additional information on Sunday, but given the temporary pause in U.S. tariffs, it is unclear if Mexico will publish a retaliatory list or other actions at this time.
Additional Resources on USMCA Compliance for imports into the United States:
To benefit from the temporary tariff reprieve, imports into the U.S. from Canada and Mexico must qualify as USMCA-compliant by (a) meeting USMCA rules of origin, and providing certification of origin. Additional information on meeting USMCA requirements can be found on the CBP website. If products from Canada or Mexico are currently entering the United States MFN duty-free and are not claiming USMCA preferences with certification of origin, they will be subject to the additional 25% duty. We recommend that importing members review their trade flows and customs data to determine if their imports from Canada and Mexico are USMCA-compliant.
Tariff action remains fluid. April 2 is less than a month away, and new tariffs on Canada and Mexico and potentially other countries may be imposed at that time.
