Will New Trump Tariffs Arrive at the White House in 2025?

Edited November 26, 2024

On January 20, 2025, the U.S. will have a change in leadership as President-elect Donald Trump returns to office. The big question on many folk’s minds: What tariffs are coming in the new year, and how can I mitigate my risk?

On the campaign trail, Trump made bold promises on tariffs that could be implemented in Q1. The speculation is endless, and it is unknown at publication which tariffs will take center stage and when.

History shows that Trump has successfully added tariffs using different tools, as seen with Section 301 China (7.5%, 25%) and Section 232 on certain aluminum (10%) and steel (25%) products. Many of the tariffs remain in place today with few modifications.

After the January inauguration, we expect executive orders addressing priorities like immigration, trade, defense, and tax laws. New tariffs will likely happen.

Today, we will review Trump’s tariff promises, the tools available to a President for tariff implementation, and ways that importers can prepare.

When Could Tariffs go into Effect?

Depending upon the tools the incoming Administration chooses to use, new tariffs could come as soon as February.

Types of Tariffs

Trump has made several statements on tariffs that could go into effect after he takes office. Here are some of the types of tariffs that have been mentioned on the campaign trail.

Universal Tariffs

A universal tariff could be applied to all goods imported into the U.S., regardless of country of origin, and may range from a flat 10% to 20%.

Country of Origin Specific Tariffs

These types of tariffs could be similar to the Section 301 China tariffs, covering specific classification numbers or it could be a blanket duty for goods of all kinds originating from a specific country.

• Goods made in China could be subject to an additional 10% to 60% tariffs.

• Articles coming from Mexico and Canada could be subject to additional tariffs of 25% to address drug and immigration issues.

• Electric vehicles made in Mexico by Chinese-owned companies could be subject to additional duties of 100%.

U.S. Companies Who Move Production Abroad

The products produced overseas could be subject to additional tariffs of 100%-200% to encourage manufacturing to stay in the U.S.

The Presidential Toolkit

Typically, the President must make a finding or determination before implementing tariffs. Here are some of the tools a President may use:

Section 301 of the Trade Act of 1974

Tariffs can be modified when “the rights of the United States under any trade agreement are being denied” or “an act, policy, or practice of a foreign country violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement, or (ii) is unjustifiable and burdens or restricts United States commerce.”

Section 232 of the Trade Expansion Act of 1962

If there is a finding “that an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security,” then the President is authorized to take “such other actions as the President deems necessary to adjust the imports of such article so that such imports will not threaten to impair the national security.”

Section 203 of the International Emergency Economic Powers Act

If the President “declares a national emergency” “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States” under Section 202(a) (50 U.S.C. §1701(a)), “the President may … investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.” In exercising this power, Section 204 (19 U.S.C. §1703) specifies that “The President, in every possible instance, shall consult with the Congress before exercising any of the authorities granted by this chapter and shall consult regularly with the Congress so long as such authorities are exercised.”

You can find additional examples of Presidential tools in the Congressional Research Service publication: Presidential Authority over Trade: Imposing Tariffs and Duties

Recommendations for Importers

Evaluate your supply chain for high-risk areas

Based on what has been said on the campaign trail, China, Mexico, and Canada are the countries of origin with the highest risk for additional tariffs. However, a universal tariff on higher-valued goods from any country can be impactful, too.

We recommend checking where goods are manufactured against a potential universal or targeted tariff to find your exposure.

• What about goods you purchase from U.S. suppliers? Will any products originating from high-risk countries be subject to a price increase if there are additional tariffs?  

• Do you have a ‘Plan B’ ready to go if tariffs are implemented on specific countries? Is it possible to source from suppliers manufacturing in other countries?

Increase your inventory prior to February

One of the easiest ways to mitigate the risk of increased tariffs would be to import early, before February 2025, before any new tariff actions can occur. The big Section 301 China tariff increases arriving on January 1, 2025, have already been announced.

Review contracts with overseas suppliers

• Adding provisions to your contracts that address the risk of additional tariffs could be a way to hedge increases impacting an importer.

• Also, companies can consider changing Incoterms®to Delivered Duty Paid (DDP) to place the burden of increased tariffs onto the exporter, who would then be responsible for the customs clearance, duties, taxes, and fees.

Prepare for shipping delays

We expect an influx of goods to be shipped to the U.S. before February. There are several reasons. The first involves the annual Lunar New Year holiday starting on January 29 and going through February 3 in various countries. The second is a potential U.S. East Coast and Gulf Coast strike around January 15- a part two from the unresolved port labor negotiations that halted freight in October and caused ripple delays for weeks. And now, the latest push to front-load goods to avoid new potential Trump tariffs.

• Review your shipping contracts with carriers. Will increased shipping demand affect your shipping rates?

• Consider if you have enough inventory available in case of shipping delays due to space availability, equipment imbalances, or a strike.

Review your product catalog

An annual review of tariff classifications of your import products is always a good idea. It’s essential to have the correct tariff number. This can especially come into play with targeted tariffs on specific classification numbers.

Evaluate your customs bond

Reviewing your customs bond will help you anticipate if there could be bond sufficiency problems in the future. During Trump’s previous term, jumps in China tariffs caught many importers off-guard. Customs bonds were quickly maxed out, with importers scrambling to obtain new bonds in higher amounts before their goods were penalized for late Importer Security Filing (ISF) or storage fees and General Order (G.O.) while the goods waited for a customs entry that required a bond to be filed.

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