US exempts USMCA goods two days after tariffs hit
The White House said on March 6, 2025, that goods qualifying for USMCA preference would face no new tariffs, after duties on Canada and Mexico began March 4 and Canada retaliated.
Two days after 25% tariffs on Canadian and Mexican goods took effect, the White House on March 6, 2025, exempted goods that qualify for preference under the U.S.-Mexico-Canada Agreement.
Tariffs take effect
The duties, imposed under the International Emergency Economic Powers Act, took effect Tuesday, March 4. U.S. Customs and Border Protection said it also raised the additional tariff on goods from China and Hong Kong to 20% from 10% that day.
Canada retaliates
Also on March 4, the Honourable Dominic LeBlanc, Canada's minister of finance and intergovernmental affairs, and the Honourable Mélanie Joly, minister of foreign affairs, announced 25% counter-tariffs on C$155 billion worth of imported U.S. goods.
The first phase covered C$30 billion of goods, effective 12:01 a.m. March 4, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics and certain pulp and paper products.
Canada said it intended to add C$125 billion of imports if the U.S. tariffs continued, drawing from a list open for a 21-day comment period. That list included electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks and buses.
The Canadian government said more than US$2.5 billion of goods and services crosses the border every day.
The adjustment
On March 6, the White House said the duties would be:
- 25% on goods that do not satisfy USMCA rules of origin.
- 10% on energy products from Canada that fall outside the USMCA preference.
- 10% on potash from Canada and Mexico that falls outside the USMCA preference.
- Nothing on goods from Canada and Mexico that claim and qualify for USMCA preference.
The White House said the change recognized the structure of the automotive supply chain and was meant to minimize disruption to the U.S. auto industry.
CBP said the exemption for qualifying goods took effect March 7. It said the rules governing whether a product qualifies, found in 19 CFR 182, were unchanged, and that the tariff updates applied from their effective dates with no retroactive application.
What it meant for carriers
From March 7, whether a cross-border load owed the new U.S. duties depended on whether the goods met USMCA rules of origin and the importer claimed the preference. CBP said it issued Cargo Systems Messaging Service notices on each tariff update.