Tariffs DELAYED on Canadian and Mexican Goods

The President has issued two new executive orders providing some relief from tariffs on products of Canada and Mexico.

The essence of the two executive orders is that Canadian and/or Mexican goods that are subject to general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS) may be entered under the duty-free provisions of that note. The note implements the trade agreement between the United States, Mexico, and Canada. This represents an alternative path to the one traditionally taken by aircraft parts importers, who often rely on the traditional zero-duty provisions that apply to many aircraft parts.

The good news is that many aircraft parts from these two jurisdictions are likely to be covered under this general note 11, so they can continue to enter duty-free until the expiration of this executive order. There is no stated expiration in either executive order; however the President has announced in social media that this forbearance shall only last until April 2, 2025.

The bad news is that there may be different documentation and analysis required to properly claim the duty-free treatment, so it may require importers to perform some additional due diligence and paperwork to support the claim of duty-free treatment.

In each case, the tariffs apply to products of Canada and Mexico, so aircraft parts that are products of these countries will be affected; and the dutiable value of maintenance that is performed in these two countries may also be affected.

As always, the implementation in the Federal Register could vary from the language of the executive order, so pay careful attention to the actual Federal Register publication implementing these executive orders.

Resources

• Canada: Executive Order re USMCA Exception
• Canada: Advanced Copy of Federal Register Notice
• Canada: Future Site of the Federal Register Notice (expected March 11)
• Mexico: Latest Executive Order re USMCA Exception
• Mexico: Advanced Copy of Federal Register Notice
• Mexico: Future Site of the Federal Register Notice (expected March 11)
• HTSUS General Note 11