Since taking office in January, President Donald Trump has issued a flurry of executive orders imposing tariffs on imports from foreign countries. To start, the executive orders focused on the country’s three largest trading partners: Canada, Mexico, and China. On April 2, 2025, an executive order was signed to implement universal tariffs on the imports from all countries and country-specific reciprocal tariffs on countries deemed to “contribute to large and persistent annual” trade deficits, according to the order. These country-specific reciprocal tariffs were then delayed 90 days.
The text of the executive order imposing reciprocal tariffs focuses heavily on the manufacturing sector: “Over time, the persistent decline in U.S. manufacturing output has reduced U.S. manufacturing capacity. The need to maintain robust and resilient domestic manufacturing capacity is particularly acute in certain advanced industrial sectors like automobiles, shipbuilding, pharmaceuticals, technology products, machine tools, and basic and fabricated metals.”
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According to the U.S. Department of Commerce’s International Trade Administration (ITA), U.S. manufacturing held a $1.2 trillion trade deficit with the rest of the world at the end of 2024. The ITA also calculates that of the $3.2 trillion of goods imported into the U.S. during 2024, $2.8 trillion can be sourced to manufacturing.1
Source: International Trade Administration
Whether tariffs will positively impact U.S. manufacturing remains to be seen. Here is an overview of the executive actions regarding tariffs and their implications for the manufacturing sector.
Canada & Mexico
On February 1, 2025, Trump signed executive orders “Imposing Duties to Address the Situation at Our Southern Border” and “Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border.” The major implications of each are as follows:
- 25% tariff on imports from Canada and Mexico
- Lower 10% tariff on energy resources from Canada
- Revocation of de minimis treatment (duty-free importation of articles up to $800); however, this was later rescinded by an amendment to the Canadian and Mexican orders
- Tariffs originally effective February 4, 2025 but were extended to March 4, 2025 for both Canada and Mexico
- Further amendments rescinded tariffs on automotive-related imports under the United States-Mexico-Canada Agreement (USMCA) and reduced tariffs on potash to 10%; however, see section on Automotive Tariffs herein
China
On February 1, 2025, Trump signed executive order “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China.” The major implications are as follows:
- 10% tariff on imports, further increased to 20% by amendment2
- Tariffs effective February 4, 2025
- Revocation of de minimis treatment; however, this provision was amended multiple times with the current amendment subjecting de minimis items to an ad valorem duty of 90% of its value and a $75 per postal item containing goods duty applicable May 2, 2025 (increasing to $150 per item after June 1, 2025)3
Tariffs on Steel & Aluminum
On February 11, 2025, Trump issued proclamations “Adjusting Imports of Steel into the United States” and “Adjusting Imports of Aluminum into the United States.” The major implications are as follows:
- Rescinds exemptions for certain countries and other alternative agreements, restoring a true 25% tariff on steel
- Increases tariffs to 25% on aluminum
- Tariffs effective March 12, 2025
Automotive Tariffs
On March 26, 2025, a proclamation “Adjusting Imports of Automobiles and Automobile Parts into the United States” was issued. The major implications are as follows:
- 25% tariff applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, and cargo vans) and light trucks
- 25% tariff applied to key automobile parts (engines, transmissions, powertrain parts, and electrical components)
- Under USMCA, 25% tariff only applies to value of non-U.S. content of the automobiles
- USMCA-compliant automobile parts are not subject to tariffs “until the Secretary of Commerce … establishes a process to apply tariffs to their non-U.S. content”
- Tariffs effective April 3, 2025 on automobiles
- Tariffs effective no later than May 3, 2025 on automobile parts
Reciprocal Tariffs
On April 2, 2025, executive order “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” was signed by Trump. The major implications are as follows:
- Baseline 10% tariff on all countries effective April 5, 2025
- Individualized reciprocal tariffs on certain countries, originally effective April 9, 2025, were given a 90-day pause4
- Individualized reciprocal tariffs on China were increased to 84% by amendment, effective April 9, 20252
- Exemptions apply for certain goods
- Canada and Mexico are unaffected by the order but still subject to tariffs imposed by the aforementioned orders
- Duty-free de minimis available
Other Resources & How We Can Help
The executive orders often refer to the USMCA, an agreement entered between the three North American countries on July 1, 2020. The full text of the agreement can be found here.
The Harmonized Tariff Schedule of the United States (HTSUS), often referred to in the executive orders, “sets out the tariff rates and statistical categories for all merchandise imported into the United States. The HTS is based on the international Harmonized System, which is the global system of nomenclature applied to most world trade in goods,” according to the ITA. General Note 11 of the HTSUS specifically relates to goods under the USMCA, as well as subchapter XXIII of chapter 98 and subchapter XXII of chapter 99.
Subscribe to our weekly publication “From the Hill” to stay up to date on the latest tariff information and contact a professional at Forvis Mazars today to learn more about tariff implications on the manufacturing sector. Here are a handful of FORsights™ related to tariffs that you may find helpful:5
- How the Manufacturing Sector Can Combat Inflation & Tariffs
- Tariffs Got You Down? Aligning Customs Valuations & Transfer Prices
- Tariff 101: Quick Q&A Guide
- Webinar: Tariff Fundamentals & Current Policy Updates From Washington
- Webinar: A Deeper Discussion on Tariffs & Policy Updates From Washington
- 1 TradeStats Express – U.S. Trade by Products.
- 2The tariffs imposed by the executive order “Imposing Duties to Address the Synthetic Opioids Supply Chain in the People’s Republic of China” and “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” combined bring a 104% tariff rate on imports from China. On April 9, 2025, Trump announced on Truth Social an increase to tariffs on China to 125%, although a form Presidential Action is yet to be released at the time this article was written.
- 3At the writing of this article, it is unclear whether the two duties related to de minimis items are both imposed or applied “either/or.”
- 4truthsocial.com/@realDonaldTrump.
- 5Forvis Mazars has also teamed up with legal firm Miller & Chevalier which has provided a helpful FAQ and flowchart on tariffs.