Current Status

Effective March 7, 2025, imports from Canada and Mexico that meet USMCA rules of origin are exempt from the additional IEEPA duties. Imports that do not satisfy USMCA rules of origin are subject to a 25% tariff rate. Energy products from Canada and potash from Mexico and Canada are subject to a reduced tariff rate of 10%.

Effective March 4, 2025, imports from China are subject to a 20% tariff rate, an increase from a 10% tariff rate that went into effect on Feb. 4, 2025.

Note that many products imported from Canada and Mexico were already duty-free under MFN rates, making USMCA declarations unnecessary. Under the new policy, importers must document and ensure USMCA compliance (if eligible) to be exempt from the IEEPA tariffs. Otherwise, the 25% IEEPA tariff would apply.

International Emergency Economic Powers Act (IEEPA)

International Emergency Economic Powers Act (IEEPA)

IEEPA is a federal law granting the President authority to counter unusual and extraordinary threats to national security without requiring congressional approval or extensive agency review. While IEEPA has historically been used to impose economic sanctions, this marks the first time it has been used to impose tariffs.

IEEPA requires the president to "consult" with Congress "in every possible instance" before taking action. While the president can act unilaterally, they must provide regular reports to Congress on the actions taken.


Tariff Rates and Products

Tariff Rates and Effective Date

The Executive Orders do not list specific products subject to the tariffs but state that the tariff applies to all goods which are "products of" these countries.

Canada and Mexico: Effective March 7, 2025:
  • No tariffs on goods from Canada and Mexico that qualify for USMCA duty-free entry into the U.S.
  • 25% tariffs on goods that do not satisfy USMCA rules of origin.
  • 10% tariffs on energy products from Canada that do not qualify for USMCA preference.
  • 10% tariffs on potash imports from Canada and Mexico that fall outside USMCA preference.

*Important: Note that many products imported from Canada and Mexico were already duty-free under MFN rates, making USMCA declarations unnecessary. Under the new policy, importers must document and ensure USMCA compliance (if eligible) to be exempt from the IEEPA tariffs. Otherwise, the 25% IEEPA tariff would apply.*

China: As of March 4, 2025, a 20% tariff applies to all imports from China, including imports from Hong Kong, an increase from the 10% tariff that went into effect on Feb. 4, 2025.

The new tariff rates above apply "in addition to any other duties, fees, exactions or charges" applicable to imported products. In other words, these tariffs will be applied on top of any existing import duties or tariffs already in effect.

Exemptions

Exemptions

The Executive Orders do not outline any exceptions nor establish an exemption process.

The Executive Orders also state that the tariffs will remain in effect until the President determines that the countries have taken "sufficient action to alleviate the crisis."


Retaliation Clause

Retaliation Clause

The original Executive Orders state that if Canada, Mexico and/or China retaliate against the United States, the President may increase or expand the scope of the duties imposed under this order.


Drawback

Drawback

The Executive Orders state that no drawback shall be available with respect to the IEEPA tariffs.


De Minimis Treatment

De Minimis Treatment

The original Executive Orders called for the elimination of de minimis treatment. However, the President has since deferred this elimination for goods subject to IEEPA tariffs.

The policy will remain in place until the Secretary of Commerce provides notification that "adequate systems are in place to fully and expeditiously process and collect tariff revenue applicable."

de minimis order amendment

Background

On Feb. 1, 2025, President Trump issued three executive orders imposing tariffs on imports from Canada, Mexico, and China. The tariffs were implemented under the International Emergency Economic Powers Act (IEEPA), citing a national emergency related to illegal immigration and flow of illicit drugs like fentanyl into the U.S.


Has your business been impacted by Tariffs?

We welcome your feedback to help us better understand and assess the impact of these tariffs on our industry and businesses. Please share with us by contacting Angela Chiang, director, international affairs, at angela.chiang@autocare.org.

Share Your Impact Story

Bill Hanvey, president and CEO, Auto Care Association, emphasized the serious impact the proposed tariffs would have on the automotive aftermarket industry, U.S. consumers, and businesses:

“ We understand the importance of national security and the need to address critical challenges, but these tariffs will have a direct and negative impact on American businesses and consumers. Canada and Mexico are our largest trading partners, and together, we make the automotive aftermarket industry more competitive. Our industry relies on highly integrated supply chains that benefit the economies of all three countries, ensuring the availability of affordable vehicle repairs for millions of consumers. These supply chains also create jobs on both sides of the border, supporting a strong and resilient workforce.”

"Tariffs and disruptions to these supply chains create inefficiencies, increase costs and weaken our industry's ability to compete globally. These tariffs will drive up costs for hardworking American families who depend on reasonably priced parts to repair and maintain their vehicles. Tariffs are not paid by our trading partners; they are paid by businesses and consumers here at home. Higher prices and supply chain disruptions will mean delays in essential vehicle repairs, ultimately impacting road safety. We urge all parties to come to the table and negotiate a solution that keeps our industry strong, protects American jobs and ensures American consumers aren’t left paying the price.”

Bill Hanvey, President and CEO, Auto Care Association

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