On February 1^st 2025, US President Donald Trump signed a series of executive orders with the intent of placing 25% tariffs on all Canadian and Mexican goods entering the US, as well as a 10% tariff on all Canadian energy and energy resources, a 10% tariff on all Chinese products entering the US, and a discontinuation of Section 321 (19 USC 1321), suspending the $800 de-minimis for all goods entering the US from these three countries.

While as of February 3^rd, 2025 the implementation of the tariffs on Canadian and Mexican goods have been temporarily suspended for 30 days, and on February 7, 2025 the tariffs on China have been temporarily suspended until further notice, the suddenness and severity of these tariffs have caused many questions to arise, particularly among business owners.

Although concrete answers are incredibly difficult to offer at this time, we at Freightcom hope to offer as clear and concise a collection of key information that can provide some sense of guidance as the situation evolves.

Tariff Updates at a Glance

• 02/01/2025 - US President Donald Trump signs 3 executive orders placing heavy tariffs on all goods entering the US from Canada, Mexico, and China, and suspending the $800 de-minimis on goods entering the US.
• 02/03/2025 – US tariffs on Canadian and Mexican goods, as well as retaliatory tariffs on American goods by Canada and Mexico suspended for 30 days.
• 02/07/2025 – US Tariffs on Chinese goods have been suspended temporarily as US Customs and Border Protection assesses the processes and procedures needed to accommodate the increase in border inspection.

Nature of Tariffs (Now Paused)

• Under these tariffs all goods entering the US originating from Canada and Mexico would be subject to an additional 25% tariff, and goods originating from China would be subject to an additional 10% tariff.
• Under these tariffs all goods originating from Canada, Mexico, and China would no longer qualify for de-minimis under Section 321.
• Shipments of Canadian, Mexican, and Chinese-origin goods valued at $250USD and over would require formal entry, and would require Merchandise Processing Fee (MPF) or a US Tax ID#.

What is an Executive Order?

In short, an Executive Order is a signed order issued by the President of the United States that dictates actions to be taken by the executive branch of the US government regarding the governance of the country.

While these orders can be reviewed and overturned by the Supreme Court in some cases, the sitting President is the only one with the ability to issue, modify, or revoke these orders.

What Canadian Goods may be Subject to US Tariffs?

There is no specification within the executive order of what goods would not be subject to these tariffs, nor is there a list of affected goods available elsewhere. This implies that all Canadian goods meant for consumption will be subject to the tariffs.

For more information, the executive order can be viewed on the Official White House website.

What American Goods may be Subject to Canadian Tariffs?

The US goods that would be subject to Canada’s retaliatory tariffs would include a wide range of meat, fish, poultry, dairy, grains, fruit, nuts, produce, prepared foods, alcohol, tobacco, cosmetic and health and beauty products, plastic, wood, and paper products, textiles and clothing, rubber goods, glassware and kitchenware, jewelry and precious metals, household and commercial appliances and machinery, drones, firearms, motorcycles, furniture, artwork, lighting, and commercial gaming consoles.

A full, comprehensive list of these items is available on the Government of Canada website.

How would the Tariffs on Chinese Goods Affect Canadian Businesses?

If a Canadian business is exporting goods to the US, the goods will be subject to a 10% tariff if their country of origin is China. This means that any goods that have been grown, majority manufactured, or are made of majority materials sourced from China, they fall under the executive order and are subject to the tariffs.

What is Section 321?

Section 321 is a provision within U.S. customs law that, until recently, permitted the duty-free importation of goods valued at $800 USD or less.

This exemption, commonly referred to as the U.S. De-minimis Value, was established to facilitate international trade and minimize administrative burdens for low-value shipments.

By keeping shipments under the $800 threshold, importers could generally bypass formal customs entries and additional fees, enabling swift, duty-free deliveries to U.S. consumers.

What Would the Suspension of the De-Minimis Mean?

Currently, goods entering the US from Canada, Mexico, and China are exempt from all duties and tariffs if their declared value is under $800 USD.

Per this new executive order, all commercial goods entering the US would be subject to US tariffs regardless of declared value.

In the event that Section 321 is suspended, all shipments originating from China to the US over $249 USD in declared value will require formal customs entry which will result in brokerage fees in addition to applicable duties and/or taxes.

While the executive order has not been published for the public at this time, more information on the US tariffs on Chinese goods can be found through the US Federal Register website.

What is Required for Formal Customs Entry?

On top of the new tariffs and preexisting duties, goods originating from China valued over $249 USD will now be subject to a Merchandise Processing Fee and will require a 10-digit US Tax ID number.

A merchandise processing fee is a U.S. Customs charge assessed for most imports into the United States. The MPF is charged at 0.3464% of the value declared on a commercial invoice, to a minimum of $32.71 USD and a maximum of $634.62 USD.

What Steps Can I Take?

Stay Informed

Monitor announcements from the US CBP, the Office of the United States Trade Representative (USTR), and Canadian trade bodies to remain aware of any changes as they happen.

Prepare for Stricter Border Control

Inspection of goods entering the US will become more frequent and more thorough. To avoid potential delays, ensure that all information listed on bills of lading, customs invoices, and all other paperwork are as accurate and detailed as possible.

Double-Check Commodity Classifications

Properly classify goods under the Harmonized System (HS) codes to ensure accurate assessment of duties and taxes.

Seek Professional Advice

If you are uncertain about any aspect of these changes, consulting a customs broker or trade compliance expert can help clarify your specific obligations and potential cost impacts.

Freightcom is Ready to Support Canadian Businesses in Need

Unfortunately, there are no simple or immediate answers to how these tariffs will affect the Canadian economic landscape in the near future. Despite this uncertainty, though, Freightcom remains a proudly Canadian company, partnering with trusted Canadian shipping carriers, and as committed as ever to provide Canadian businesses with support in the best way we can.

If you have any questions or concerns regarding how Freightcom is navigating these tariffs, please contact your Freightcom account manager.

This is a challenging time for all Canadians, and it is vital that we stand united to support one another.