Last week’s US Tariff announcement continues to reverberate through the industry. On April 2, 2025, invoking his authority under the International Emergency Economic Powers Act of 1977 (IEEPA), President Donald Trump announced reciprocal tariffs against hundreds of countries. The announcement, in conjunction with other Executive Orders, simultaneously impacted Canadian exporters, small Canadian e-commerce merchants and large volume importers into the US.
The US has instituted "reciprocal tariffs" on virtually all trade, with certain exclusions for Canada and Mexico. While these exclusions are welcome, they do not offset the profound challenges they impose on Canada and many other countries.
On Apr 5, 2025, a 10 percent tariff was implemented on virtually all countries. These tariffs are on top of all other duties/tariffs currently in force. At the same time, many countries are bracing for higher duties; for certain countries, the 10% reciprocal tariff will be replaced on April 9, 2025 with higher tariffs, which, for some countries, approach 50%. Many countries have proposed various concessions to avert such tariffs.
Some analysts have commented that this may have been the objective all along: to establish a baseline tariff on all countries and negotiate concessions around higher bilateral tariffs. In a Footwear News article, Rick Helfenbein, independent consultant and former chairman, president, and CEO of the AAFA, said: “More than likely, the 10 percent tariffs may stick as the main goal, and the other (higher) numbers will dissipate over time (and negotiation).
Below are a few examples of the higher tariff rates on major U.S. trading partners (many of whom are major apparel suppliers) scheduled to be implemented on April 9, 2025:
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China: 34%
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European Union: 20%
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Vietnam: 46%
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Japan: 24%
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South Korea: 25%
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Taiwan: 32%
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India: 26%
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United Kingdom: 10%
Link to list of countries/tariff rates: see Annex I of the Federal Register Notice.
Exports of Canadian goods to the US
Canadian goods that comply with CUSMA/USMCA continue to be exempt from US tariffs. This was originally implemented in the first week of March and continues without change. This is a positive for Canadian exporters of apparel. This applies to products that qualify for the CUSMA rule of origin and to exporters of TPL goods.
However, at the same time, the US confirmed new tariffs on Canadian exports of automobiles and auto parts. Taken together with existing tariffs on steel and aluminum (and products made from those inputs) and anticipated product-specific tariffs covering copper, pharmaceuticals, semiconductors, and lumber - Canada will need to respond to a range of US tariffs.
Canada’s retaliatory tariffs.
Canada has implemented tariffs on a range of US products, including apparel and home textiles. Other products may be subject to tariffs in future. We have created and updated a summary of Canada’s retaliatory tariffs.
De minimis
The US has significantly reduced the viability of the de minimis program under which low-value shipments under $800 can enter the US duty-free with minimal paperwork. These shipments (postal and courier shipments) will be subject to duties as of May 2, 2025. This is outlined in this Executive Order. Changes to the program only relate to exports of Chinese origin goods to the US. However, once these restrictions are in place and are working, it is likely that de minimis for Canadian (or other country) origin products will be subject to these duties/restrictions.
US Customs Guidance
Companies may wish to review the executive Orders and Fact Sheets on the White House website: https://www.whitehouse.gov/presidential-actions/
A more useful resource is US Customs Guidance:
https://content.govdelivery.com/accounts/USDHSCBP/bulletins/3da7831 We have also posted this guidance with highlights of relevant sections.