Imposition of Tariffs by the United States on the Importation of Products from Mexico

U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) announced on March 3, 2025, the necessary actions to impose additional tariffs on imports of products from Mexico, in accordance with Executive Order 14194, "Imposing Duties to Address the Situation at Our Southern Border" and Executive Order 14198, "Progress on the Situation at Our Southern Border" and the “Amendment to Duties to Address the Situation at Our Southern Border," starting on March 4, 2025.

The main actions established by CBP and DHS are as follows:

• The new additional import tariff will be an ad valorem rate of 25 percent, which will apply to all products originating from or produced in Mexico that are intended for consumption or withdrawn from a warehouse for consumption in the United States.
• To control this, the Harmonized Tariff Schedule of the United States (HTSUS) has been modified to create a new tariff fraction 9903.01.01, which will include all "articles that are products of Mexico."
• It is important to note that products from Mexico will also be subject to the general tariffs established in sections of chapters 1 through 97 of the HTSUS and will continue to be subject to anti-dumping duties, countervailing duties, or other duties, taxes, fees, and charges applicable to such products.
• It is also important to consider that the new 25 percent ad valorem tariff applies without exception to Mexican products, including those that were originally sourced in accordance with the Mexico-U.S.-Canada Agreement (USMCA), exemptions or temporary tariff reductions, products subject to regulations established in the U.S. Federal Register and products for which Mexico was the last country of substantial transformation, among others.

Nevertheless, it is important to highlight that there are currently some exceptions and exclusions, such as humanitarian donations, informational materials and personal goods in passenger luggage, among others. The application of these exceptions must be analyzed on a case-by-case basis to avoid potential contingencies.

Lastly, in response to this, the government of Mexico, through President Claudia Sheinbaum, has stated that a combination of tariff and non-tariff measures will be implemented, with specific details to be revealed on March 9, 2025.

As mentioned above, the U.S. also implemented, as of March 4, 2025, a 25 percent and 10 percent tariff on imports of products originating from and coming from Canada and China, respectively.

In response, Canada announced a 25 percent tariff on 30 billion Canadian dollars (approximately $20.7 billion) in goods imported from the U.S., effective immediately. Canada plans to impose a 25 percent tariff on an additional CA$125 billion in U.S. imports within 21 days if the U.S. tariffs are not withdrawn. Canada is also considering non-tariff measures, potentially related to U.S. security and energy security. Canada has published its list of products subject to tariffs.

Similarly, China imposed a 15 percent tariff on U.S. chicken, wheat, corn, and cotton, and a 10 percent tariff on U.S. sorghum, soybeans, pork, beef, fruits, vegetables, dairy products and seafood. China has published additional information about its retaliation list of products subject to tariffs.  

As a result, companies with operations in Mexico must assess the impact of these tariffs on their costs and supply chains. Key considerations that companies must take into account include the following.

• Tariff strategies: optimization of supply chains to minimize costs and evaluate origin alternatives
• Exploration of alternative regimes: analysis of import and export regimes, such as bonded warehousing, to assess their feasibility and potential benefits
• Contract review: evaluation of current trade agreements to identify adjustments that reduce costs
• Trade defense: representation in trade disputes and negotiations to mitigate adverse impacts
• USMCA compliance: evaluation of applicable rules of origin, labor provisions and customs procedures

In this regard, although the specific 25 percent tariff would not be exempt under this certificate, the certificate could provide an exemption from the base tariff to which the imported product is subject. In other words, the following applies:

Without USMCA: If a Mexican company exports products to the U.S. subject to a general 15 percent tariff without meeting the USMCA requirements, the 25 percent tariff outlined above will be added. Therefore, the importer would pay a total of 40 percent in tariffs.

With USMCA: If a Mexican company exports products to the U.S. subject to a general 15 percent tariff, and they have a USMCA certificate of origin, the general 15 percent tariff would not apply, and only the 25 percent tariff discussed here would apply. Therefore, the importer would pay a total of 25 percent in tariffs.

This scheme should be analyzed individually for each case.

• Lobbying: To find the best strategies and solutions to the problems by working with the government.

Please contact the authors for further information.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.