Recently there have been newly imposed tariffs on goods from China, Canada, and Mexico. While tariffs on Canada and Mexico have been delayed, the tariffs on Chinese imports officially took effect at 12:01 AM on February 4, 2025. These changes may impact pricing, supply chain dynamics, and lead times across various industries.
Background on the Tariff Changes
- Executive Orders: President Trump signed three Executive Orders imposing additional duties on goods from Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA).
- Delays for Canada & Mexico:
- On February 3, 2025, the U.S. and Mexico reached an agreement to delay implementation of tariffs on Mexico from February 4 to March 4.
- On the same day, the U.S. and Canada delayed tariffs on each other’s goods from February 4 to March 4.
- China Tariffs in Effect: As of February 4, 2025, a new 10% tariff applies to all goods from China (including Hong Kong SAR), in addition to any existing tariffs.
- Effect on De Minimis: Previously, items valued at or under $800 could enter the U.S. without duties under the “de minimis” rule, provided a single consignee didn’t receive more than $800 in goods on the same day. However, products now subject to these new tariffs can no longer use that duty-free allowance. Even if they’re under $800, they’ll still incur additional tariffs.
China has announced retaliatory measures, including tariffs of up to 15% on select U.S. imports and new export controls on key minerals. While Canada and Mexico’s tariffs remain on hold, they may be imposed at any time if negotiations change course.
Understanding the Impact of China’s Tariff Changes on Your MCL Orders
At MCL, our customers are at the heart of everything we do, and we’re committed to ensuring your continued success and satisfaction. If you have any questions about orders that may be impacted by this change, please reach out to your dedicated Customer Concierge. Our team is here to provide personalized assistance, address any concerns, and work closely with you to find the best possible solutions. We value your partnership and look forward to supporting you every step of the way.
Potential Supply Chain & Logistics Impacts
In addition to the newly imposed tariffs, there are several other possible disturbances in the supply chain and logistics landscape that customers should be aware of and prepare for:
- Increased Customs Processing & Delays
With de minimis eliminated, millions of shipments that previously bypassed customs will now require full documentation and tariff payments. Customs clearance times will likely increase, causing potential delays at ports and distribution centers.- Important Shipping Update (UPS)
As of February 4, 2025, UPS has suspended its Service Guarantee for shipments originating in China, Hong Kong, and Canada. Due to recently imposed tariffs, packages from these regions may experience delays. UPS has contingency plans in place to expedite deliveries; however, some delays are still expected. For more details, please refer to their official statement. - Feb 7th, 2025 – The cancellation of the de minimis trade exemption has been delayed to allow companies time to allocate adequate resources for managing the increased compliance and customs paperwork. This measure aims to alleviate shipping delays caused by the exemption’s removal. MCL will continue to monitor the situation and proactively communicate any impacted orders.
- Important Shipping Update (UPS)
- Rising Costs for Logistics Companies
Small-package carriers (DHL, FedEx, UPS, USPS) may adjust operations to manage increased customs processing, introducing new costs or surcharges. Warehousing and fulfillment centers will likewise implement new compliance measures, increasing overhead.
Securing Your Supply Chain: MCL’s Strategic Diversification Beyond China
MCL’s competitive manufacturing network extends beyond our China-based facilities to include Thailand, Vietnam, and Taiwan, offering valuable alternatives amid evolving tariffs and regulatory changes. Our “China Plus One” strategy reduces reliance on a single source, helping you avoid sudden cost increases or disruptions.
Why Consider Diversification?
- Lower Tariff Risk: Alternate manufacturing sites reduce exposure to shifting trade policies.
- Continuity & Flexibility: Multi-country sourcing ensures uninterrupted production, even if one region faces challenges.
- Technology & Scalability: Our partners support anywhere from quick-turn prototypes through high-volume orders.
Next Steps
As the situation evolves, we are closely monitoring potential effects on costs and availability. We recommend businesses review their procurement strategies and stay updated on further policy changes. If you have any questions about how these tariffs may affect your supply chain, feel free to reach out to your dedicated Customer Concierge.