TL;DR as of Monday, February 3, at 12:30 PM Central Time: Additional 25% Tariffs for goods from Mexico suspended for 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 12:00 PM central time on February 3, here is what we currently know about the Mexico tariffs. 

  • President Trump announced the Mexico tariffs would be delayed for a month. Mexico’s president Claudia Sheinbaum announced she would send 10,000 Mexican troops to the U.S.-Mexico border to assist with the control of the flow of fentanyl into the U.S. In exchange, the U.S. agreed to strengthen efforts to prevent the trafficking of high-powered firearms into Mexico. 

What we still don’t know: 

  • If this delay will be permanent or if the tariffs will be imposed beginning in March. 
  • If there will be further discussions between the two administrations to come to additional agreements.  

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. 

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 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.