Tariff Talk

A shadow…the groundhog saw it and, with that, pronounced six more weeks of winter. Groundhog Day…whether it’s the day surrounding Punxsutawney or a Bill Murray box office flashback, importers are experiencing their own Groundhog Day. Some thought February 1 might be the new April Fools, as news of reduced tariffs on Taiwan and India—and potential increases on Canada and countries trading oil with Cuba—never came. Some take the Beetlejuice approach and don’t speak of it, risking it coming to fruition. But importers must prepare for the worst while hoping for the best.

In January, the White House announced a trade deal with Taiwan, with an effective date of January 15 for reduced tariffs, as well as a reduction of IEEPA tariffs on India for its commitment to purchase Venezuelan oil through the U.S. instead of Russia, effective February 1. Without official notice, reductions cannot be taken, and without details, customs brokers cannot provide clear guidance to importers.

On the reverse, Canada has seen threats of a 50% tariff on aircraft sold to the U.S., along with aircraft decertification. Under a separate social media post, a 100% tariff on all Canadian goods was expressed if the country finalized a trade deal with China. With upcoming talks between the U.S. and Canada regarding USMCA, the hope is that the threat is merely a tactic to set the tone for future negotiations.

Historically, Mexico, Russia, and Venezuela have been the primary sources of oil to Cuba, with Belgium, Spain, and Canada being the primary recipients of Cuban refined products. Without official notice, importers must wait to see the final rule, who will be impacted, and how.