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Global Commodity Intelligence

Q2 2025 | APRIL - JUNE

Temporary Pause of U.S. Tariffs on USMCA Goods from Mexico and Canada

Key Takeaways

President Trump has signed Executive Orders postponing tariffs on USMCA-covered Mexican and Canadian goods until April 2, 2025.
The tariff delay applies exclusively to products qualifying under the U.S.-Mexico-Canada Agreement.
Tariffs on Chinese imports remain active and unchanged, with ongoing retaliatory measures.

On March 6, 2025, President Trump signed two Executive Orders delaying the imposition of tariffs on Mexican and Canadian goods traded under the U.S.-Mexico-Canada Trade Agreement (USMCA)—known as CUSMA in Canada and T-MEC in Mexico—until April 2, 2025. While the U.S. has postponed new tariffs on USMCA-eligible goods, non-USMCA imports from these countries are already subject to significant tariff increases. At the same time, the U.S. maintains its existing tariff structure on Chinese imports, amid a series of escalating Chinese countermeasures. The following sections provide detailed, country-specific updates and outline the evolving trade responses.

Country-wise Updates

Mexico:

USMCA Goods:

Tariffs and retaliatory actions related to Mexico on products traded under the USMCA have been delayed until April 2, 2025.

Non-USMCA Goods:

A 25% tariff is now applicable to all products of Mexico imported into the U.S., in addition to already applicable duties, fees, or charges, such as Sections 232 or 301 Tariffs.
There is no drawback available for the additional 25% tariff.

Mexican Retaliation:

President Claudia Sheinbaum of Mexico has not announced specific retaliatory actions but indicated that proposed retaliatory measures would be announced on Sunday, March 9th, 2025.

Canada:

USMCA Goods:

Tariffs and retaliatory actions related to Canada on products traded under the USMCA have been delayed until April 2, 2025.

Non-USMCA Goods:

A 25% tariff is now applicable to all products (except energy products identified below) of Canada imported into the U.S., in addition to already applicable duties, fees, or charges, such as Sections 232 or 301 Tariffs.
A 10% tariff is now applicable to all energy or energy resources from Canada, which includes crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, hydropower, and critical minerals.
There is no drawback available for the additional 25% or 10% tariff.

Canadian Retaliation:

A two-stage retaliation approach has been announced:
- An initial 25% tariff on $30 billion of U.S. goods (textiles, agricultural products, electronics, weapons, and paper).
- A subsequent 25% tariff on $125 billion of U.S. imports (vehicles, aerospace, agricultural, and electronics products).

China:

Tariffs on Chinese Goods:

As of March 4, 2025, a 20% tariff is now applicable to all products of China/HK/Macau imported into the U.S., in addition to already applicable duties, fees, or charges, such as Sections 232 or 301 Tariffs.
There is no drawback available for the additional 20% tariff.

Chinese Retaliation:

Tariffs: 15% tariff on coal and LNG products, as well as a 10% tariff on crude oil, agricultural machinery, and large-engine cars.
Export controls: On February 4, 2025, China announced export controls on tungsten, tellurium, bismuth, molybdenum, and indium. On March 4, 2025, China prohibited the export of dual-use Chinese-origin products and materials to 15 U.S. companies.
Private Company investigations: On February 4, 2025, China announced an anti-trust action against Alphabet Inc.
Entity List: On February 4, 2025, China placed Calvin Klein/Tommy Hilfiger and Illumina, Inc. on its Unreliable Entities List, prohibiting certain export and investment actions within the boundaries of China related to such entities. On March 4, 2025, China added 10 additional U.S. Companies to its Unreliable Entities List.

Summary

USMCA Goods Exemption: Only products under the USMCA enjoy the tariff postponement until April 2, 2025; all other imports from Mexico and Canada face immediate tariff increases.
Persistent Chinese Measures: Tariffs on Chinese imports remain at 20%, accompanied by new Chinese retaliatory actions.
Retaliatory Responses: Both Mexico and Canada have signaled or initiated measures that may impact U.S. exports, underscoring a volatile trade environment.
No Drawback Provisions: None of the additional tariffs—whether 25%, 10%, or 20%—are eligible for drawback.
Ongoing Developments: Further official announcements and potential escalations are expected in the coming days.