2025 Tariffs Updates: Key Impacts on U.S., Canada, China, and Mexico

Updated August 14, 2025 originally written March 3rd

All following points are sourced from official government sources like the White House official website, The Federal Register, Government of Canada website, Mexican Government Presidency of the Republic, and the Ministry of Foreign Affairs in The People’s Republic of China. However, as this is a rapidly changing situation, additional sources include information from official government twitter accounts. 

Summary:

The 2025 trade wars began with sweeping U.S. tariff hikes targeting Canadian, Mexican, and Chinese-origin goods, quickly escalating into a multi-front dispute. March saw 25% duties on Canadian and Mexican products and additional tariffs on Chinese goods, alongside the removal of duty-free 321 exemptions. April brought “Liberation Day” reciprocal tariffs and higher rates on autos, while Canada retaliated with billions in counter-tariffs and a national boycott of U.S. goods. China faced some of the steepest penalties—peaking at 125% plus IEEPA surcharges—before easing to 10% reciprocal and 20% IEEPA rates. A federal court challenged the legality of the tariffs, but appeals have kept them in place, prolonging uncertainty for global trade. Businesses are urged to verify compliance, adjust pricing strategies, and work with partners who can manage landed costs in this volatile environment.

What started the trade wars and tariff escalations in 2025?

In March 2025, the U.S. has commenced 25% tariffs on goods with Mexican or Canadian Countries of origin. While the originally published 10% tariffs on goods from China went into effect at 12:01 a.m. ET, February 3rd., the U.S. enacted an additional 10% tariff on China country of origin goods which started at 12:01 a.m. ET March 4th. These updates formalize the White House announcement on Saturday, February 1st that the US will implement 25% tariffs on goods with Mexican or Canadian Countries of origin in all consumer goods categories and an additional 10% tariff on imports originating from China.

It’s important to make the distinction between Country of Origin products vs imports from that country. Country of origin is defined as where the products are manufactured, not where they are shipping from. The response has been strong, especially from Canada, with similar tariffs announced on US origin goods starting March 4th as well. Exact dates for retaliatory tariffs have not been published. 321 duty free exemptions are no longer available for products with a Canadian, Chinese, or Mexican Country of Origin.

April tariffs and Liberation Day

Following the March tariff actions, the U.S. escalated trade measures in April 2025. The White House imposed a 25% tariff on autos and auto parts that did not meet CUSMA content requirements. Then on April 2, designated “Liberation Day” by the administration, a 10% baseline “reciprocal” tariff took effect on all imports, with higher country-specific rates for roughly 60 nations. Canada and Mexico were initially exempt from these reciprocal tariffs, and a 90-day pause on most higher rates except for those targeting China was announced soon after, later extended into the summer. These moves signaled a hardening stance on trade enforcement and border security, with the administration framing the measures as part of a broader campaign to address drug trafficking and illegal immigration.

Canada response and retaliatory tariffs

Canada’s countermeasures began on March 4 with a 25% tariff on CAD $30 billion in U.S. goods, with an additional CAD $125 billion list under consideration. On March 13, Canada expanded its response by adding 25% tariffs on CAD $29.8 billion worth of U.S. steel, aluminum, and consumer goods. April brought a new 25% tariff on U.S. motor vehicles that fail CUSMA content rules, alongside a six-month tariff remission program for Canadian industries such as manufacturing, health, security, and food and beverage. On the consumer front, a “Buy Canadian” boycott targeting U.S. goods and travel surged, contributing to a more than 60% drop in U.S. alcohol exports to Canada in the first half of 2025 while boosting domestic Canadian sales.

China and U.S. escalations

While April’s reciprocal tariff rollout largely spared Canada and Mexico in its first phase, China remained firmly in the crosshairs. Beijing condemned the additional U.S. tariffs as violations of global trade rules, pledging to challenge them at the World Trade Organization and implement “corresponding countermeasures” to protect its export industries. At their height earlier in the year, U.S. tariffs on certain Made in China goods climbed as high as 125% on top of existing IEEPA measures, creating severe cost spikes for importers. Over the summer, those rates eased but remain significant, settling at around a 10% reciprocal tariff layered with an additional 20% IEEPA tariff on many categories. Even at these reduced levels, the duties continue to weigh heavily on cross-border trade, driving companies to reevaluate sourcing strategies and adjust landed cost calculations.

Legal developments

In late May, the U.S. Court of International Trade ruled on May 28 that the broad application of the tariffs under the International Emergency Economic Powers Act (IEEPA) was illegal. However, the Court of Appeals for the Federal Circuit (CAFC) issued a temporary stay on May 29 and a longer-term stay on June 10, allowing the tariffs to remain in place pending appeal.

 The court issued a permanent injunction blocking enforcement of these tariffs and ordering an end to their collection. While the ruling has cast doubt on the legal foundation for some measures enacted in early 2025, many remain in effect as appeals proceed. The decision adds another layer of uncertainty for businesses already grappling with rapid policy changes, as legal challenges could alter tariff landscapes again in the coming months. While a ruling could arrive in August at the earliest, the losing side is almost certain to appeal to the Supreme Court delaying resolution.

What you can do  

There are several things in your control to immunize yourself from this volatility. Check out our article on 6 Strategies for Tariff Resilience. A summary includes: 

• Remove any traditional logistics and warehouse solutions that do rely on de minimis or similar trade programs  

• Double-check your product information for accuracy. To maintain compliance, ensure your country of origin is correct. With higher scrutiny on imports, there is a higher risk of fines for incorrect information.   

• Look at your localization strategy – With increased cost from tariffs, make sure your local-market pricing and strategy reflect the changes.

• Find partners that can ensure you are always compliant and ready to ship anywhere, that can take the import liability and guarantee landed costs up front.  Find the professionals. 

If you have questions about regulations and how this affects your business, book a meeting to talk to one of our experts.

FlavorCloud will be sharing real time updates on how regulations are changing, come back to our Trade and Tariff Hub for the latest updates.