President Trump Tariffs on U.S. Imports – April 2, 2025
April 4, 2025
Background On April 2nd, 2025, President Trump signed the Executive Order National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National […]Background
On April 2nd, 2025, President Trump signed the Executive Order National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security invoking his authority under the International Emergency Economic Powers Act of 1077 (IEEPA) to address trade deficit.
Using his IEEPA authority, President Trump imposed a «10% tariff on all countries effective April 5, 2025 and individualized reciprocal higher tariffs on the countries with which the U.S. has the largest trade deficits effective on April 9, 2025». (Fact Sheet: President Donald J. Trump Declares National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security – The White House).
Canada and Mexico
For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect, and are unaffected by this order. This means USMCA compliant goods will continue to see a 0% tariff, and non-USMCA compliant goods will see a 25% tariff. (https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-proceeds-with-tariffs-on-imports-from-canada-and-mexico/).
In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12% reciprocal tariff.
Automotive sector
On March 26, 2025, President Trump signed a proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imports of automobiles and certain automobile parts countering trade practices that threaten to impair U.S. national security. Those tariffs came in effect at midnight on April 3, 2025. (https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-adjusts-imports-of-automobiles-and-automobile-parts-into-the-united-states/)
- The 25% tariff applies to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary.
Importers of automobiles under the United States-Mexico-Canada Agreement will have to certify their U.S. content and systems will be implemented such that the 25% tariff will only apply to the value of their non-U.S. content.
USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with U.S. Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-U.S. content.
Canada’s Countermeasures
On April 3, 2025, the Prime Minister of Canada, Mark Carney, announced measures to counter new US tariffs on automobiles. These countermeasures include:
- 25% tariffs on non-CUSMA compliant fully assembled vehicles imported into Canada from the United States.
- 25% tariffs on non-Canadian and non-Mexican content of CUSMA compliant fully assembled vehicles imported into Canada from the United States.
CUSMA – Automotive Rules of Origin
The automotive rules of origin include:
- a 75% regional value content (RVC) requirement;
- Similar regional value requirements for core parts such as engines and transmissions and complementary auto parts;
- a 70% North American steel and aluminum requirement; and
- a labour value content requirement.
- The labour value content requirement means that a significant percentage of the value of a vehicle must be produced by workers earning the equivalent of at least US$16 per hour.
Passenger vehicles and light trucks must have 75% RVC from 2023.
As for Heavy Trucks (not mentioned in the Executive order on tariffs) must have 64 % RVC since July 1, 2024 and 70 percent beginning July 1, 2027.
https://www.trade.gov/usmca-auto-report?anchor=content-node-t14-field-lp-region-1-5