In an unprecedented move, the Trump administration is already trying to lower expectations regarding these upcoming tariff actions. Details about these pledged measures, which go into effect on April 2. President Donald Trump’s trade policy has changed almost by the hour to date. Perhaps most notably the spotlight has been placed on the recent 10% tariffs on imported steel and aluminum that went into effect March 12. While these tariffs received legendary implementation trumpets, they lacked substantive altitude above previous tariff levels. Removal of the de minimis exclusion. This exclusion did not require any duty payments on goods valued less than $800 entering the United States.
The prospect for these proposed 25% tariffs on all goods imported from Mexico and Canada being implemented is unclear at this time. These tariffs were scheduled to go into effect this week. Now, their fate is uncertain, and businesses as well as trade partners are left waiting with bated breath. This is not terribly surprising, given that Trump issued a vaguely worded memorandum on February 13. It implied that something very fundamental was about to change in U.S. trade policy.
Consider, for example, Trump’s unvarnished acknowledgment of the peril of indiscriminate tariffs. He warned that using a legislative sledge hammer instead of a scalpel risks doing irreparable harm to important American interests. This acknowledgement is a promising sign that the Administration has learned from the harmful effects that previous negative impacts on the domestic economy and foreign relations.
On March 11, Trump blazed a new path in his tariff war. He threatened Canada with a ridiculous 50% tariff on aluminum and steel. This threat was pulled back later that very day, indicating the administration’s first steps toward a more flexible approach. Trump suggested there would be some “flexibility” under his administration’s tariff ideas, which could create opportunities for exemptions and adjustments.
"I don't change. But the word 'flexibility' is an important word." – Donald Trump
The looming threat of reciprocal tariffs from other nations, such as China, further complicates the current international trade battlefield. In a recent speech, Treasury Secretary Scott Bessent identified this as the “Dirty 15.” This cast includes the usual suspects—countries currently under scrutiny or investigation for perpetrating subsidization and dumping on the United States. Still, countries targeted by such retaliation will be limited to about a dozen or so nations.
In response to these developments, the European Union has postponed its retaliatory tariffs, originally set to begin on April 1. This pause provides space to continue productive negotiations and discussion, reflecting a commitment among global partners to pursue diplomatic solutions.
Looking forward, the Trump administration is expected to announce their next round of tariffs. This time very much scaled down in their entirety sometime next week. These two moves together signal a thoughtful approach to phasing in new trade policies. More tariffs might come down the road as well. As noted above, despite these plans, the final decision on tariffs continues to be in flux and subject to change.
According to reports, the expected 25% tariffs on Mexican and Canadian-origin goods are likely delayed beyond their original implementation date of July 1, 2020. This lack of clarity only more confounds the picture for our members and companies who depend on cross-border trade in North America.
