Trump Announces Canada Tariffs: What We Know
TL;DR as of Monday, February 3, at 3:45 PM central time: Additional tariffs on goods from Canada have been delayed by 30 days.
Background: Over the weekend, President Trump signed three executive orders announcing new tariffs on goods from Mexico, Canada, and China. He cited the International Emergency Economic Powers Act (IEEPA) and the National Emergencies act, among others, as grounds for these tariffs to stop the flow of illicit drugs and illegal immigrants into the United States.
Scarbrough will continue to follow the situations and provide updates as they become available.
As of 3:45 PM central time on February 3, this is the latest update:
- Prime Minister Justin Trudeau posted on his X account that there would be a 30-day pause on tariffs against Canada.
- Trudeau also said Canada would enhance border security efforts across Canada, including implementing a Fentanyl Czar and launching a Canada-U.S. Joint Strike Force to combat organized crime and money laundering.
As of 3:00 PM central time on February 3, here is what we currently know about the Canada tariffs.
- President Trump has a meeting scheduled with Canadian leaders at 2:00 PM central time to discuss the tariffs.
- He has already said he doesn’t know if there is anything Prime Minister Trudeau could do to avoid the tariffs
- Canada has announced a $155B tariff package against the U.S. in response to the proposed tariffs.
- A Federal Register notice was filed and is scheduled to be published on February 5.
As of Saturday, February 1, here is what we know:
President Trump signed the executive order announcing these tariffs would go into effect at 12:01 AM eastern time on February 4, and there is no exclusion process for companies to avoid the additional tariffs. Each executive order also includes a clause stating any retaliatory action by the affected country could result in an increase in the scope of the tariffs imposed against them. The tariffs would be an additional 25% on top of existing tariffs, except for “energy or energy resources” which would be subject to an additional 10% tariff.
As of Friday, January 31 at 4:00 PM central time, this is what we know:
- There has been no communication to the trade from the United States Trade Representative (USTR) in the form of a federal register notice clearly stating the reasoning, scope, and timeframe of such an action.
- CBP has been unable to comment on how they would collect new tariffs due to a lack of official guidance.
- ABI software providers haven’t been provided with any notice to program their systems for the trade community.
- Previous additional tariffs (i.e., Section 301 or Section 232) have both had public comment periods and implementation timeframes that spanned months rather than days.
What we don’t know:
- We aren’t aware of any specific legal framework that would allow President Trump to bypass these mechanisms to impose new tariffs.
- We don’t know if a good that qualifies for USMCA treatment today would be subject to the additional duties.
If you are a Scarbrough (or Parker & Co.) client, you will receive information from a Scarbrough representative regarding how these potential tariffs may add to your existing duty payments if they go into place.