What’s Changing?
The U.S. has imposed new tariffs on imports from China, Mexico, and Canada, effective February 4, 2025. These measures will have significant implications for supply chains, pricing, and trade logistics across multiple industries.
Additionally, tariffs on imports from Mexico and Canada have been temporarily paused for 30 days as of February 1, 2025. While these tariffs are not currently in effect, businesses should prepare for potential implementation once the pause expires.
This blog post outlines the key tariff changes, exclusions, and trade regulations that importers and logistics professionals need to know.
Critical Implications
10% Tariff on Chinese Imports
A 10% tariff has been applied to all imports from China, including goods from Hong Kong. This tariff affects a broad range of industries, from manufacturing and technology to consumer goods and automotive parts.
Key considerations for businesses:
- Increased costs for imported raw materials and finished goods.
- Supply chain disruptions due to companies shifting sourcing to avoid tariffs.
- Potential price adjustments on retail products dependent on Chinese supply chains.
Importers should assess their current sourcing strategies and consider potential alternative suppliers outside of China to mitigate cost increases.
Goods in Transit Exclusion
Not all shipments from China will be subject to the 10% tariff. Goods that were already in transit before the tariff deadline may qualify for an exemption.
Exemption Conditions:
- Goods must have been loaded onto a vessel or in transit on their final mode of transport before 12:01 AM EST on February 1, 2025.
- The shipment must be cleared for consumption or withdrawn from a warehouse for consumption by 12:01 AM EST on March 7, 2025.
Compliance Requirements:
- Importers must reference HTSUS 9903.01.23 in their Customs documentation to claim this exclusion.
Businesses should ensure logistics teams and customs brokers are aware of these requirements to avoid unnecessary tariff costs.
Exclusions for China and Hong Kong Imports
Certain imports from China and Hong Kong are exempt from the 10% tariff.
Tariff Exemptions Include:
- Personal-use items
- Chapter 98 entries, including:
- Goods undergoing repairs
- Metal processing
- U.S. components assembled abroad
- Donations of food, clothing, and medicine (HTSUS 9903.01.21)
- Informational materials such as books, films, and educational content (HTSUS 9903.01.22)
Companies should review HTS classifications to determine if any of their imports qualify for these exemptions.
Paused Tariffs on Mexican and Canadian Imports
25% Tariff on Imports from Mexico and Canada
A 25% tariff was scheduled to take effect on most imports from Mexico and Canada, with the exception of energy products. However, this tariff has been temporarily paused for 30 days, beginning February 1, 2025.
While this delay provides short-term relief, businesses should prepare for potential implementation if trade negotiations do not lead to permanent exemptions.
HTSUS Classifications for Canadian Imports
Canadian imports are classified under specific HTSUS tariff codes, which will determine the duty rates if the 25% tariff is reinstated.
Key HTSUS Classifications:
- HTSUS 9903.01.10 – Applies a 25% tariff on most Canadian imports.
- HTSUS 9903.01.13 – Applies a 10% tariff specifically to Canadian energy products (oil, gas, minerals).
Exemptions:
- Humanitarian goods such as food and medicine.
- Informational materials including publications and films.
Businesses importing from Canada should ensure HTS codes are correctly classified and determine exemption eligibility for their products.
Retaliation Clause
If Canada, Mexico, or China retaliate with tariffs of their own, the U.S. may respond with additional duties or broaden existing ones.
Canada has already announced a 25% tariff on $155 billion worth of U.S. goods, targeting industries such as:
- Agriculture
- Alcohol
- Packaging materials
China has indicated plans to impose countermeasures, though specific industries have not yet been identified.
Businesses should prepare for potential supply chain disruptions and higher import costs if retaliatory tariffs escalate trade tensions.
Foreign Trade Zones (FTZs)
Goods originating from Canada, China, and Hong Kong that enter Foreign Trade Zones (FTZs) must now be designated as privileged foreign status.
This means that tariffs will be applied immediately when goods enter U.S. commerce, rather than allowing businesses to defer duties until the goods leave the FTZ.
Companies using FTZs for warehousing or manufacturing must adjust their strategies to account for new duty obligations.
No Duty Drawbacks
Businesses will not be eligible to claim duty refunds for tariffs paid under the duty drawback program.
This means companies that previously imported goods, paid tariffs, and later exported them will now face higher costs without an option for reimbursement.
Steel & Aluminum Tariffs: Expanded Duties and Importers Impact
On February 10, 2025, the White House issued an executive order reinstating and expanding tariffs on steel and aluminum imports, set to take effect March 12, 2025. This measure imposes a 25% tariff on many imported steel and aluminum, removing previous exemptions for Canada, Mexico, Japan, and South Korea. The administration has framed the move as a necessary step to prevent foreign dumping, bolster domestic manufacturing, and protect industries critical to national security.
Key Importers Impacts
- Increased Costs – U.S. manufacturers, construction firms, and heavy equipment producers will face higher material expenses.
- Supply Chain Disruptions – Companies reliant on imported steel and aluminum should anticipate potential delays and cost adjustments.
- Retaliatory Tariffs – Canada and Mexico, two of the largest U.S. steel and aluminum suppliers, have signaled potential countermeasures, which could further escalate trade tensions.
- Broader Trade Strategy – The administration has indicated that these tariffs may be the first in a series of new trade measures, with additional duties under consideration for semiconductors, automobiles, and pharmaceuticals.
What Importers Should Do
- Assess sourcing strategies and explore domestic alternatives where possible.
- Monitor trade negotiations for potential adjustments to tariff policies or retaliatory actions.
- Plan for cost increases by reviewing pricing structures and supplier agreements.
With the tariffs officially taking effect on March 12, 2025, companies must act now to mitigate financial and operational risks in an evolving trade landscape.
How Will These Tariffs Impact Your Importers?
The 10% tariff on Chinese imports, including goods from Hong Kong, introduces immediate cost and compliance challenges. Businesses importing affected products must ensure proper documentation to qualify for exemptions, such as the goods-in-transit exclusion, which applies only to shipments that departed before February 1, 2025, and are cleared by March 7, 2025, under HTSUS 9903.01.23.
Canadian energy imports—including oil, gas, and minerals—are also subject to this 10% tariff, adding complexity to cross-border supply chains and potentially increasing costs for industries reliant on these resources. Additionally, the revocation of the de minimis exemption eliminates duty-free entry for small parcel shipments from China, Canada, and Mexico, impacting businesses that depend on platforms like Shopify and Amazon Marketplace for fulfillment.
While tariffs on Canadian and Mexican imports have been temporarily paused for 30 days as of February 1, 2025, businesses should prepare for possible implementation once the pause expires. Canada has already announced retaliatory tariffs on U.S. goods, targeting key industries such as agriculture, alcohol, and packaging, signaling the potential for further trade disruptions.
These developments will require companies to reassess sourcing strategies, update compliance protocols, and adjust pricing models to offset rising costs. Partnering with MTA Lines can provide businesses with strategic guidance on navigating these challenges, ensuring supply chains remain agile and compliant in an evolving trade environment.
Next Steps
- Learn More – For detailed insights into the new tariffs and their implications, review the official statements:
- Stay Updated – Monitor developments from federal agencies and track potential retaliatory actions from China, Canada, and Mexico that could further impact trade.
- Follow Us – Stay connected on social media for clear, easy-to-skim updates on trade policy changes. As your trusted freight forwarder, we break down complex developments into actionable insights to help you navigate the evolving global trade landscape with confidence.
- Get in Touch – Contact an MTA associate to discuss how these tariffs may impact your shipments and explore strategies to minimize disruptions. Email us at sales@mtalines.com or connect directly with your shipment coordinator for personalized guidance.
