Tariff Talk

April Fools! What a relief it would have been for U.S. importers to see those words this morning. Unfortunately, all signs indicate that the tariffs set to take effect on April 2 and 3 will proceed as planned. The uncertainty now lies in the specific terms, timing, and structure of their implementation—will they be immediate? Will they come with prior notice? Are they actual tariffs or just announcements of future tariffs? Meanwhile, Senate Democrats have called for a vote to nullify the President’s state of emergency under the International Emergency Economic Powers Act (IEEPA) regarding Canada, citing concerns over the relatively low volume of fentanyl seized at the northern border. They are seeking Republican support from agriculture- and automotive-heavy states that stand to suffer if the tariffs move forward.

The global response has been similar. Canada, China, and certain EU members have already imposed countermeasures targeting specific commodities. Each country claims readiness for the next round of retaliatory tariffs but has provided few details. Mexico, however, has had its response plan prepared since the 30-day pause was enacted.

The U.S. Trade Representative (USTR) has released its 40th annual National Trade Estimate Report, which was cited in the America First Trade Policy executive order as a key input for issuing reciprocal tariffs. The report highlights barriers to U.S. exports across nearly 60 trading partners in 14 categories, including import policies, human rights concerns, packaging regulations, and corruption issues. Among the most significant challenges, Canada’s CBSA Assessment and Revenue Management (CARM) system has caused import clearance delays and eliminated the ability for U.S. companies to clear goods in Canada as nonresident importers. Meanwhile, the EU faces challenges due to a lack of harmonized customs enforcement, where one Member State’s customs agency is not required to follow the decisions of another. Additional challenges stem from chemical and packaging waste regulations that complicate trade.

Last week, speculation swirled about a “Dirty 15” list of nations subject to reciprocal tariffs, aligning them with the same commodity tariffs they impose on the U.S. However, a last-minute shift now points to an across-the-board tariff on all nations, potentially at a flat percentage rate. Given the high VAT rates in Canada and the EU, which range from the high teens to low twenties, speculation suggests an initial tariff rate of 20%. Unlike the U.S. average sales tax of 7.5%, VAT (Value-Added Tax) is applied at the time of import, replacing traditional sales tax in many countries.

Additional Tariff Developments to Watch:

25% IEEPA tariff on Canada and Mexico, with USMCA-qualified goods currently exempt.

25% secondary tariff that may be imposed on countries purchasing Venezuelan oil, remaining in place for one year from the last purchase date. Reports indicate China, Turkey, Spain, Colombia, Brazil, and India as key buyers.

25% tariff on automobiles, light trucks, and certain parts from all countries.

The establishment of an external revenue service to collect tariffs and duties on foreign services, suggesting a potential charge before goods are even exported to the U.S.

Anticipated updates on de minimis rule changes, which would subject shipments under $800 to tariffs and increased government scrutiny. These changes were paused 30 days ago, pending a system for postal and courier data collection.

As details emerge, OCEANAIR will continue to provide exclusive compliance updates and maintain our Tariff 2025 Chart to keep you informed. Stay tuned for updates throughout the week.