Updated March 6, 2025
Tariff reversal: President Donald J. Trump wrote on social media that he was suspending new tariffs on most imports from Mexico and Canada until April 2, 2025. The exemptions, covering goods brought into the country under a trade pact Mr. Trump signed in his first term, came just two days after he incited a trade fight by imposing tariffs of 25 percent on two of the nation’s closest economic partners.
On March 3, 2025, President Donald J. Trump announced tariffs would go into effect against Canada, Mexico and China. Beginning on March 4, the U.S. will impose a tariff of 25 percent on all goods entering the U.S. from Mexico and Canada and a heightened rate of 20 percent on all goods from China. The governments of Canada and China have both announced they will retaliate against American exports by levying duties against our products, and the government of Mexico has stated it will announce retaliatory measures over the weekend. Since this announcement, a number of questions have arisen. To help clarify key points, we’ve compiled some Facts and FAQs.
Facts
What action did President Trump take regarding tariffs?
President Trump used his national security authority under the International Emergency Economic Powers Act (IEEPA) to implement blanket tariffs on all goods entering the U.S. from Canada, Mexico and China.
Is this action legal?
The IEEPA has never been used in this way before, so the legality of these tariffs is uncertain. While President Trump asserts that this action is legal, its validity may be challenged in court.
How long will these tariffs last?
That is unclear. This action is at the discretion of the President so it could be brief, or it could be prolonged. However, it’s important to note that President Trump has already launched a series of additional trade-related investigations and actions, which may lead to further tariffs against these three countries, as well as others.
What is the Canadian government’s response?
The government of Canada has announced it will immediately impose tariffs of 25 percent on a selection of U.S. goods valued at $30 billion. Included in this Phase 1 list are several U.S. produce items, including melons, cherries, apricots, peaches, citrus, tomatoes and pecans. Click here for a list of U.S. products subject to 25 percent tariffs. The Canadian government has stated that if the U.S. maintains tariffs on Canadian goods, additional U.S. products will face retaliatory measures in the next 21 days. A proposed Phase 2 list of products has been noticed for public comment until March 25 and the list includes almost all fruit, vegetables, and tree nuts. We will continue to provide updates to membership as the situation evolves.
What is the Chinese government’s response?
The Chinese government has announced retaliation against U.S. exports into the country beginning March 10, including an additional 10 percent tariff against U.S. fruit, vegetable, and tree nut exports. Click here for a translation of the Chinese release and list of U.S. products subject to 10 percent tariffs. Goods that have been shipped before March 10 and imported into China between March 10 and April 12 shall not be subject to the additional tariffs, according to the release. We will update membership as additional and English-translated information becomes available.
What is the Mexican government response?
Mexican President Claudia Sheinbaum has said Mexico will respond in kind to any U.S. tariffs but has delayed announcing any retaliation until the weekend. We will update membership as we learn more.
How much impact might this have?
Canada is the No. 1 market for fresh produce exported from the U.S., Mexico is the No. 2 export market for produce and China is a Top 10 major export market.
FAQs
Are there exemptions to the tariffs for certain goods entering the U.S.?
At this time, there are no exemptions nor a process to request an exemption waiver for Chinese, Mexican or Canadian goods entering the U.S. Retailers have asked for a waiver for food entering the U.S. Various agricultural producer organizations have requested exemptions for key agricultural inputs like potash. The Administration has thus far only deviated from the tariff action by saying tariffs on Canadian energy exports into the U.S. would receive a 10 percent tariff instead of a 25 percent tariff. Western Growers supports exemptions for all inputs entering the U.S. Over the last few years, we have seen a rise in fertilizer prices, for example, which we would not want exacerbated. We will update membership should exemptions be granted or a waiver process be created.
How are imported goods valued for tariffs?
Congress outlines how goods are to be valued for tariff and duty calculations in 19 USC § 1401a. U.S. Customs has enacted regulations to implement this statute under 19 CFR § 152. How goods are valued may depend on individual circumstances so please contact your customs broker or attorney about how your imported goods should be valued. The U.S., Canada, China and Mexico are all parties to the WTO agreement on Customs Valuation, which essentially creates a universal global methodology to value goods for importation. While we do not have information on Canadian, Chinese and Mexican custom laws, the methodology should be the same for goods being exported into those countries.
Who is responsible for the import duty?
The importer of record is responsible for paying the duty at time of importation. However, you should examine your contract language because by contract, buyers and sellers can alter who is responsible for tariffs.
Are tariffs applied to the entire finished product or only the non-U.S. origin components when exporting U.S. goods to Mexico for processing and re-importing to the U.S.?
At this time, there is no process by which U.S. origin goods could be segregated from Mexican product in order to change the value of the good before a tariff is applied. Multiple industries have asked the President to exclude the value of U.S. origin goods on products imported from Mexico or Canada. We will update membership should a process to exclude U.S. origin inputs be created.
Will Canada exempt U.S. goods from tariffs if they are processed in Canada and then returned to the U.S.?
We are not aware of Canadian tariff laws allowing for an exclusion from tariffs for U.S. origin produce that enters the country, is processed, and then returns to the U.S. Please contact local counsel to determine if there are Canadian customs provisions that apply.
Will goods imported from Mexico into the U.S. and then shipped to Canada be subject to two tariffs?
Canada has provided notice that goods that are transshipped from Mexico through the U.S. are exempt from retaliatory tariffs. We do not know, however, what the Canadian Customs service considers “transshipment.” Please contact local Canadian counsel. In addition, there is a process in the U.S. by which goods entering the country might not be charged a tariff. Specifically, if goods are imported only temporarily because they will be exported or incorporated into other goods for export, consider whether tariffs can be avoided through programs such as: temporary importation under bond (TIB), duty drawback or use of a free trade zone. These are fact-specific situations, and we urge engagement with your U.S. attorneys to see if any of them apply.
For any questions, please contact Tracey Chow at [email protected].