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Tariffs on products from Canada and Mexico took effect early this morning.
 
What’s going on: At 12:01 a.m. EST today, 25% tariffs on Canadian and Mexican goods and a 10% tariff on Canadian energy products went into effect. 

• The move ends a Feb. 3 pause on tariffs of goods from Canada and Mexico, enacting President Trump’s Feb. 1 executive orders invoking the International Emergency Economic Powers Act to apply tariffs in response to the sustained influx of illicit drugs into the U.S.
• President Trump also amended an executive order to raise the existing additional tariff on Chinese goods to 20% from 10%, citing China’s failure to take adequate measures to reduce the flow of synthetic opioids into the U.S.

What it means: Here’s how the tariffs will apply: 

• The 25% tariffs on products from Canada and Mexico will apply in addition to any already applicable duties, fees or charges.
• The 25% tariffs do not apply to certain “energy or energy resources” imported from Canada, which are instead subject to a 10% tariff. These are defined as crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, hydropower and critical minerals.
• For products from China, a 20% tariff will be applied—an increase from the 10% tariff that went into effect on Feb. 4. Duty-free de minimis treatment is suspended; however, the elimination of de minimis treatment is deferred until the Secretary of Commerce has ascertained that “adequate systems are in place to fully and expeditiously process and collect tariff revenue.”  

The response: China, which announced retaliatory tariffs Feb. 5, “said on Tuesday it would impose additional tariffs of between 10% and 15% on agricultural products ranging from soybeans and corn to dairy and beef” (Reuters).

• Canadian Prime Minister Justin Trudeau “promised to impose retaliatory 25 percent tariffs on U.S. goods” (Newsweek).
• Mexico has also said it will respond with its own tariffs. 

For more information: You can find guidance from U.S. Customs and Border Protection on implementation of the duties on Canada here and here, guidance on implementation of duties on Mexico here and here and guidance on implementation of the duties on China here.