Hello Customers, Colleagues, and Friends.
We are writing to inform you of critical updates regarding additional import tariffs on China goods, Pending steel & aluminum additional tariffs, as well as changes in the ocean freight market.
Tariffs on China, Mexico, and Canada
Starting March 4, 2025, President Trump will impose 25% tariffs on imports from Mexico and Canada, with a lower 10% tariff on Canadian energy products, citing national security concerns and drug trafficking enforcement. Additionally, tariffs on Chinese imports will double from 10% to 20% (previsouly imposed earlier this month) under the International Emergency Economic Powers Act (IEEPA) due to China’s role in fentanyl production.
These tariffs are expected to have widespread effects on industries relying on imports, particularly automotive, agriculture, and manufacturing sectors, as well as on consumer prices. The move has already triggered retaliatory threats from Canada and Mexico, with Canada planning to impose $30 billion in countermeasures immediately, and another $125 billion three weeks later. Mexico’s government is currently negotiating with U.S. officials to prevent escalation.
CBP will strictly enforce compliance, rejecting entry summaries without the required duty payments and imposing monetary penalties for incorrect classifications. De minimis exemptions remain suspended, meaning all shipments may be entered under formal or informal entry procedures. Importers should ensure that HTS classifications and duty payments are accurately reported to avoid enforcement actions.
New Steel & Aluminum Tariffs
Effective March 12, 2025, a 25% tariff will be reinstated on steel and aluminum imports, eliminating previous quota agreements and exemptions with Canada, Mexico, the EU, and Japan. The tariffs now extend to downstream products like extrusions, slabs, and sheets. No exclusions will be granted beyond this date. CBP will strictly enforce classifications, penalizing misreporting with maximum monetary fines. Additionally, goods entering Foreign Trade Zones (FTZs) will be subject to full tariff rates upon withdrawal, and no duty drawback will be available. Further expansions of derivative products are expected in the coming months.
Ocean Freight Market Updates
Recent trends indicate declining ocean freight rates due to reduced demand and lower import volumes from China. With capacity increasing and demand softening, this presents an opportunity for shippers to take advantage of more favorable pricing and improved space availability. Importers should consider capitalizing on the lowering ocean freight rates from China, taking into consideration the implications of additional 10% tariffs.
What This Means for You
- Increased duty obligations for goods from China
- Heightened CBP enforcement for tariff compliance—penalties for misclassification and incorrect filings
- Elimination of steel and aluminum quota agreements and upcoming additional duties on steel and aluminum raw materials
- Lower ocean freight rates create a cost-effective opportunity for shipping
Please continue to plan accordingly for your import, export, and domestic transportation needs.
Sincerely, Your friends at Krenz & Hannan International
SOURCES
CSMS # 63988468 – GUIDANCE: Additional Duties on Imports from China
CSMS # 63988467 – GUIDANCE: Additional Duties on Imports from Canada
whitehouse.gov | ncbfaa.org | freightwaves.com