Current Status

Mexico and Canada:

The executive orders have been suspended and reintroduced since their announcement in February 2025. 

Currently, the following is in place:

An announcement was made by President trump on the 6th March confirming the suspension of the 25% tariffs on goods qualifying as ‘originating’ under the USMCA trade agreement.  This is in response to discussions with representatives from Ford, General Motors and Stellantis who stressed the financial impact these tariffs would have on the sector.

According to Ford CEO, Jim Farley, the imposition of the tariffs would significantly benefit EU, South Korean and Japanese manufacturers who import between 1.5m and 2m vehicles into the US each year as they would not be impacted by the 25% tariff.

The total vehicles imported from Mexico and Canada total 5.3m with most sold to US consumers and this presents a significant percentage of imports into the US, ultimately raising prices to the consumer and affecting the popularity of these brands.

The de-minimis removal has been suspended pending review of options for collecting the import taxes and may be reintroduced at a later date.

China

Tariffs have recently been increased on Chinese originating goods from 10% to 20%. 

In response to the tariffs, China has retaliated by introducing tariffs on US originating products as per below from 10 March 2025:

• 15% tariff on chicken, wheat, corn and cotton
• 10% tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products

One key element of these tariffs confirms that if the goods have been shipped from the US and imported between March 10, 2025 and April 12, 2025, the additional tariffs will not be liable on import into China.

Future Measures

President Trump announced on 6 March 2025 that the US were continuing to review possible ‘Reciprocal Tariffs’ with an implantation date of 2 April 2025.  At time of writing, the scope and impacted countries in unknown but we expect this to include the EU as the US President has made it clear that he considers there is an imbalance in trade between the US and EU.

The EU has been monitoring the situation and is poised to implement retaliatory tariffs against the US, likely in a similar vein to the 2018 measures covering commodities such as motorcycles, bourbon, steel and aluminium.

Copper:

An announcement was issued on 25 February 2025 confirming the US Government had initiated a review of imports of raw mined copper, copper concentrates, refined copper, copper alloys, scrap copper, and derivative products.  The main supplier of copper into the US is China but the EU may be impacted as well if tariffs are introduced.

Timber:

An announcement was issued on 1 March 2025 confirming the US Government had initiated a review of imports of timber, lumber, and their derivative products (such as paper products, furniture, and cabinetry).

Although there are limited details on who is the target of any possible tariffs, we consider that, as the US are reviewing trade barriers, the introduction of the EU Deforestation Regulation in late-2025 may be a contributing factor as this covers these commodities.

It will be interesting to see how the above investigations link to the announced ‘Reciprocal Tariffs’ due to 2 April 2025.

How does this impact the EU?

Any EU businesses who sell goods to the US must remain vigilant and regularly monitor developments as these tariffs will create significant financial burden on the US customer and may require negotiations to maintain business.

Options, such as ‘First Sale’, may be a consideration for EU businesses who are acting as middle men in a supply as this could reduce the impact of the tariffs by lowering the ‘customs value’ on import into the US.  Any use of this method would require supply of potentially sensitive commercial information so it may not be an option for most businesses but is worth considering.

It is also important to note that the tariffs on Chinese goods relate to the Origin.  Any Chinese originating goods exported form the EU to the US will fall under the current 20% tariffs so businesses should review any impact this poses to the supply chain.

For companies who purchase goods from US suppliers, the likelihood of increased costs is real as many components are obtained from the Far East and will be impacted by these new tariffs.  Special attention should be made to confirm the possible impact on the supply chain and alternatives to minimise the risk of increased costs.

What about the future?

This situation is constantly evolving and we recommend that any businesses who trade, either directly or indirectly with the US, review the impact of current or potential tariffs as these could significantly affect global trade.

A global trade war is on the horizon and businesses involved in cross-border trade must stay aware of any developments and assess how these will affect the business so it can react to minimise any financial impact.

EU exporters must review developments and assess the impact on their supply chains to ensure costs are considered.