The Federal Register has released notices regarding the implementation of 25% tariffs on products from Mexico and Canada, effective at 12:01 a.m. ET on March 4. These tariffs will apply to most goods entering the U.S. from Canada or Mexico, with the exception of energy products from Canada, which will incur a 10% duty.

Scope of Tariffs: The tariffs apply to “products of Mexico/Canada,” which includes goods originating from either country.

Exclusions from the Additional Tariff:

The following items are exempt from the additional 25% duty:

  1. Personal Use Goods
    Goods intended for personal use are not subject to the tariff.
  2. Goods under Chapter 98 HTSUS:
    The additional tariffs do not apply to goods entering the U.S. under the following provisions:

    • 9802.00.40 or 9802.00.50 (Repairs/Alterations): Tariffs apply only on the value added in Mexico or Canada.
    • 9802.00.60 (Metal Articles Processed Abroad): Tariffs apply only on the value added in Mexico or Canada.
    • 9802.00.80 (Assembly of U.S. Components): Tariffs apply only on the value added in Mexico or Canada.
    • 9801 Goods (Exported from the U.S. and returned from Mexico/Canada): Not subject to the additional tariff, even if originating from Mexico or Canada.
    • Other Chapter 98 goods are also excluded from the tariff.
  3. Humanitarian Donations
    Donations of food, clothing, and medicine intended for humanitarian relief are exempt. Claims should be made using:

    • HTSUS 9903.01.02 for Mexico
    • HTSUS 9903.01.11 for Canada
  4. Informational Materials
    Merely informational materials are not subject to the additional tariff. Claims should be made using:

    • HTSUS 9903.01.03 for Mexico
    • HTSUS 9903.01.12 for Canada

Additional Information:

  • No Drawback for These Tariffs: There is no drawback available for the tariffs on Mexico and Canada goods. However, duty drawbacks may apply to other eligible duties paid.
  • No Grace Period for Goods in Transit: There is no grace period for goods that are currently in transit. Tariffs will apply as of the effective time.
  • Section 321 De Minimis Goods: Goods subject to Section 321 (de minimis) are not affected by the tariffs until the Department of Commerce establishes a collection system.

FTZ Goods:

Products from Mexico or Canada entering a Foreign Trade Zone (FTZ) after 12:01 a.m. ET on March 4 must be admitted in privileged foreign status. When these goods enter the U.S. for consumption, they will be subject to the duty rate in effect at the time of admission into the FTZ.

  • Goods admitted under domestic status to an FTZ are exempt from the tariffs.