New Trade Measures Bring Uncertainty & Challenges to Businesses and Stock Market

The Trump administration has announced sweeping trade measures set to take effect tomorrow and in the coming weeks, with far-reaching implications for industries across nearly every sector of the U.S. economy. Following President Trump’s announcement of major tariff actions against Canada and Mexico, the Dow Jones Industrial Average plunged more than 600 points, reflecting market uncertainty and concerns over potential disruptions. Given these developments, businesses should assess their supply chains, explore domestic alternatives, and stay informed to ensure compliance with new regulations and duties. We will continue to provide updates as more details emerge.

Please contact us if you have any questions or require assistance in navigating these changes. Below is a brief overview of the major trade actions taken by the Trump Administration:

Increased Tariffs on Chinese Imports Due to Synthetic Opioid Concerns

In response to the continued influx of synthetic opioids from China, the President has amended Executive Order 14195 to increase tariffs on Chinese products from 10% to 20%. This action underscores the Administration's commitment to addressing the synthetic opioid crisis affecting the United States.

North American Tariffs To Go Into Effect; New EO Amendments Increase Tariffed Goods

The Trump administration will implement 25% tariffs on all Mexican and Canadian goods starting Tuesday, March 4. In 2024, Canada and Mexico exported over $900 billion worth of goods to the United States, accounting for approximately 28% of total U.S. goods imports. These exports include significant volumes of automobiles and auto parts, agricultural products, and various consumer and industrial goods.

The tariffs were initially set to take effect in early February but were delayed by 30 days following phone discussions between President Trump and the leaders of Canada and Mexico. That pause expires at midnight on Tuesday, triggering the new tariff measures.

Notably, these tariffs will be cumulative with existing duties, potentially resulting in total tariffs of up to 50% on Canadian steel and 35% on Canadian aluminum. This aligns with previous executive orders from President Trump imposing tariffs on steel and aluminum imports.

The de minimis exemption will temporarily remain in effect for imports from Canada and Mexico, even as U.S. tariffs on those countries take effect on Tuesday. This exemption allows U.S. imports valued under $800 to bypass additional duties. It was originally set to be eliminated for Canadian and Mexican products under the new tariff orders.

However, President Donald Trump amended the tariff orders, delaying the exemption’s removal. The amendments state that duty-free de minimis treatment will continue until “adequate systems are in place” to efficiently process and collect tariff revenue on qualifying imports. Once the Commerce Secretary certifies to the president that these systems are operational, the de minimis exemption for Canadian and Mexican products will be discontinued.

Tariffs on Agricultural Imports Effective April 2

President Trump also announced that, starting April 2, 2025, tariffs will be imposed on certain agricultural products imported into the United States. This measure aims to encourage domestic agricultural production and reduce dependency on foreign products. Specific details regarding the products affected and tariff rates have yet to be disclosed.

Investigation into Timber and Lumber Imports

On March 1, President Trump signed an Executive Order initiating a Section 232 investigation under the Trade Expansion Act of 1962 to assess the national security implications of timber, lumber, and derivative product imports. This investigation aims to evaluate the extent to which foreign subsidies and trade practices affect the competitiveness of the U.S. wood products industry and its ability to meet domestic demand.

Expansion of Domestic Timber Production

Concurrent with the import investigation, the President issued an Executive Order to boost domestic timber production. This directive seeks to streamline federal policies to enhance forest management, reduce wildfire risks, and decrease reliance on imported timber. The order mandates the Department of the Interior and the Department of Agriculture to expedite timber production by utilizing tools such as the Good Neighbor Authority and stewardship contracting.