In today's rapidly changing global trade environment, staying informed about the latest developments in tariffs is crucial for businesses engaged in cross-border trade. This insight by Andrew Thurston provides an update on the current status of US tariffs, including their impact on countries like Mexico, Canada, China, and the UK.
Current Status
Mexico and Canada:
The executive orders have been suspended and reintroduced since their announcement in February 2025.
Currently, the following is in place:
| Commodity | Targeted Countries | Tariff Code | Executive Order | Introduction Date | Duty Rate | Current Status |
|---|---|---|---|---|---|---|
All commodities |
Canada |
All |
Section 301 |
04/03/2025 |
25% |
Suspended for USMCA qualifying goods - suspended until 02/04/25 |
All commodities |
Mexico |
All |
Section 301 |
04/03/2025 |
25% |
Suspended for USMCA qualifying goods - suspended until 02/04/25 |
An announcement was made by President trump on the 6th March confirming the suspension of the 25% tariffs on goods qualifying as ‘originating’ under the USMCA trade agreement. This is in response to discussions with representatives from Ford, General Motors and Stellantis who stressed the financial impact these tariffs would have on the sector.
According to Ford CEO, Jim Farley, the imposition of the tariffs would significantly benefit EU, South Korean and Japanese manufacturers who import between 1.5m and 2m vehicles into the US each year as they would not be impacted by the 25% tariff.
The total vehicles imported from Mexico and Canada total 5.3m with most sold to US consumers and this presents a significant percentage of imports into the US, ultimately raising prices to the consumer and affecting the popularity of these brands.
The de-minimis removal has been suspended pending review of options for collecting the import taxes and may be reintroduced at a later date.
China:
Tariffs have recently been increased on Chinese originating goods from 10% to 20%.
| Date | Commodity | Targeted Countries | Tariff Code | Introduction Date | Duty Rate | Current Status |
|---|---|---|---|---|---|---|
01/02/2025 |
All commodities of Chinese Origin |
China |
All |
04/02/2025 |
10% |
Live -increased to 20% on 03/03/2025 |
In response to the tariffs, China has retaliated by introducing tariffs on US originating products as per below from 10 March 2025:
- 15% tariff on chicken, wheat, corn and cotton
- 10% tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products
One key element of these tariffs confirms that if the goods have been shipped from the US and imported between March 10, 2025 and April 12, 2025, the additional tariffs will not be liable on import into China.
Future Measures
President Trump announced on 6 March 2025 that the US were continuing to review possible ‘Reciprocal Tariffs’ with an implantation date of 2 April 2025. At time of writing, the scope and impacted countries in unknown but we expect this to include the EU as the US President has made it clear that he considers there is an imbalance in trade between the US and EU.
The EU has been monitoring the situation and is poised to implement retaliatory tariffs against the US, likely in a similar vein to the 2018 measures covering commodities such as motorcycles, bourbon, steel and aluminium.
Copper:
An announcement was issued on 25 February 2025 confirming the US Government had initiated a review of imports of raw mined copper, copper concentrates, refined copper, copper alloys, scrap copper, and derivative products. The main supplier of copper into the US is China but the UK and EU may be impacted as well if tariffs are introduced.
Timber:
An announcement was issued on 1 March 2025 confirming the US Government had initiated a review of imports of timber, lumber, and their derivative products (such as paper products, furniture, and cabinetry).
"Although there are limited details on who is the target of any possible tariffs, we consider that, as the US are reviewing trade barriers, the introduction of the EU Deforestation Regulation in late-2025 may be a contributing factor as this covers these commodities.
It will be interesting to see how the above investigations link to the announced ‘Reciprocal Tariffs’ due to 2 April 2025."
How does this impact the UK?
For UK businesses who sell goods to the US, it may not be wholly obvious how these new tariffs will impact exports to the US.
The first consideration is the Origin of any goods exported to the US as the new tariffs relate to the origin of the product, not where it was shipped from.
For a company selling Chinese origin goods to the US, there will now be an additional 10% tariff applied to those goods which will increase costs in the supply chain. We advise UK exporters to review the impact of these new measures and open communications with customers to ensure they are aware of the situation.
If your business sells to the US via e-commerce means, it will not escape these new tariffs. As I mentioned earlier, the new orders remove the duty-free deminimis for in-scope products so sales could suddenly be affected as customers are exposed to the additional tariffs.
For companies who purchase goods from US suppliers, the likelihood of increased costs is real as many components are obtained from the Far East and will be impacted by these new tariffs. Special attention should be given to confirm the possible impact on the supply chain and alternatives to minimise the risk of increased costs.
What about the future?
The UK may avoid the full effect of any tariffs but the recent announcement on the prospects of a US-UK Trade deal will help to further alleviate any risks. It will be interesting to understand if the US will require the UK to introduce any measures against China, such as on Electric Vehicles, to align with US policies.
This situation is constantly evolving and we recommend that any businesses who trade, either directly or indirectly with the US, review the impact of current or potential tariffs as these could significantly affect global trade.
A global trade war is on the horizon and businesses involved in cross-border trade must stay aware of any developments and assess how these will affect the business so it can react to minimise any financial impact.
