U.S. Tariffs on Mexico, China, and Canada: Exemptions, Retaliation, and What’s Next

A rubber stamp with the word "TARIFFS" in bold red letters is pressed onto a beige document, leaving a clear red ink imprint. The design includes stars surrounding the text, giving it an official look. The "Majestic Spice" logo appears at the bottom of the image.
10Mar

U.S. Tariffs on Mexico, China, and Canada: Exemptions, Retaliation, and What’s Next

If you read our last article, you know that the U.S. implemented tariffs on Mexican, Canadian, and Chinese goods starting March 4, 2025. Now, we’ll take a closer look at the USMCA exemptions, how each country is responding, and what new trade measures might be on the horizon.

USMCA Exemptions: Which Goods Are Protected?

While the U.S. imposed a 25% tariff on all imports from Mexico and Canada, not everything is affected. Goods that qualify under the United States-Mexico-Canada Agreement (USMCA) rules of origin are exempt from these additional tariffs. To qualify, products must meet specific regional value content (RVC) requirements, meaning they need to be largely sourced and processed within North America. Here’s a breakdown of some exempt categories:

Mexico:

  • Agricultural products: Fresh and dried chilies, oregano, avocados, berries, tomatoes, and beef.
  • Automobiles and auto parts: Vehicles must contain at least 75% North American content.
  • Electronics: Televisions and consumer electronics assembled with North American-made components.
  • Textiles: Apparel made with fabric and yarn originating from North America.

Canada:

  • Dairy products: Milk, cheese, and butter within the tariff-rate quota system.
  • Energy products: Natural gas and crude oil receive a reduced 10% tariff.
  • Lumber and wood products: Softwood lumber that meets USMCA content requirements.
  • Metals: Aluminum and steel products made from North American materials.

These exemptions help stabilize key industries, preventing drastic cost increases on essential imports.

Mexico’s Response

Mexico is preparing retaliatory tariffs on U.S. imports, targeting goods where U.S. businesses rely on Mexican trade. While the full list hasn’t been released, sources suggest that pork, apples, potatoes, and whiskey may see tariffs as high as 20%. Additionally, non-tariff measures such as stricter inspections and import licensing requirements could slow down supply chains.

China’s Response

After the U.S. doubled tariffs on Chinese imports from 10% to 20%, China hit back with its own measures:

  • 15% tariffs on chicken, wheat, corn, and cotton.
  • 10% tariffs on sorghum, soybeans, pork, beef, fruits, vegetables, dairy, and fish.

This retaliation will particularly affect U.S. farmers, who rely heavily on the Chinese market for agricultural exports.

Canada’s Response

Canada has implemented 25% tariffs on CA$30 billion worth of U.S. goods, with plans to extend them to CA$125 billion if U.S. tariffs remain. The targeted products include:

  • Processed foods: U.S. dairy, grains, and packaged food items.
  • Consumer goods: Furniture, appliances, and automotive parts.
  • Industrial materials: U.S.-made steel and aluminum.

Impact on the Spice Industry

The spice industry is also feeling the effects of these tariffs.

Mexican Imports (USMCA Exemptions Apply)

Spices like chilies, cumin, and oregano are not subject to the new tariffs as long as they meet the USMCA rules of origin. This means that, for now, prices and supply chains remain stable for these products.

Chinese Imports (Higher Costs Expected)

Many Chinese-sourced spices, however, are now subject to the increased 20% tariff. This affects widely used ingredients like garlic, ginger, and star anise, leading to potential price increases in the U.S. market.

What’s Next? Potential New Trade Measures

Steel and Aluminum Tariffs Begin March 12

The U.S. will impose a 25% tariff on global steel and aluminum imports starting March 12, 2025. This move is expected to increase costs for manufacturers that rely on these materials.

Reciprocal Tariffs Start April 2

On April 2, 2025, the U.S. is set to implement reciprocal tariffs, targeting countries that impose duties on American goods. This policy could escalate tensions with China, the EU, and other key trade partners.

What This Means for Businesses

These new tariffs and retaliatory measures are already causing supply chain disruptions and cost increases across multiple industries. Businesses should:

  1. Review their supply chains to determine which products are affected.
  2. Look for alternative suppliers that qualify under USMCA exemptions.
  3. Monitor trade negotiations for potential policy shifts.

Staying informed and adapting sourcing strategies will be critical as these trade policies evolve.

Sources

  • CBP. (2025, March 4). U.S. Customs and Border Protection Tariff Updates. Retrieved from https://cbp.gov
  • Holland & Knight LLP. (2025, March 4). Mexico Announces Retaliatory Tariffs. Retrieved from https://hklaw.com
  • Rabobank. (2025, March 4). Economic Analysis of U.S. Tariff Changes. Retrieved from https://rabobank.com
  • Greenberg Traurig LLP. (2025, March 4). U.S. Tariff Policy Changes. Retrieved from https://gtlaw.com
  • JW Law. (2025, March 4). U.S. Steel and Aluminum Tariff Updates. Retrieved from https://jw.com
  • Capacity LLC. (2025, March 4). Trade Policy Insights. Retrieved from https://capacityllc.com
  • Government of Canada. (2025, March 4). Canada’s Trade Response to U.S. Tariffs. Retrieved from https://canada.ca
  • Feed Navigator. (2025, March 4). Impact of Tariffs on Agricultural Imports. Retrieved from https://feednavigator.com
  • The Times. (2025, March 4). Global Economic Reactions to U.S. Trade Policies. Retrieved from https://thetimes.co.uk

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