Tariffs Imposed on Canada, Mexico, and China – EU Tariffs on the Horizon

On Monday, March 3rd, President Trump announced his intention to move forward with 25% tariffs on imports from Canada and Mexico, effective Tuesday, March 4. Under this plan, all imports from both countries will face a 25% tariff, except for Canadian energy products, which will be taxed at 10%. Additionally, Trump has doubled tariffs on Chinese imports, raising them from 10% to 20%.

However, on March 6, the administration announced that the tariffs on Mexico and Canada will now be delayed until April 2nd. Trump previously paused auto tariffs at the request of the Big Three US automakers General Motors, Ford, and Stellantis. This continued vacillation adds to the ongoing uncertainty surrounding Trump’s trade policies, as the administration continues to negotiate with both countries.

Beyond these immediate actions, Trump has reaffirmed his intention to impose a 25% tariff on European Union (EU) imports, though he has yet to specify which industries will be affected. Thus far, discussions have primarily focused on automobile tariffs and other unrelated trade matters. The EU has already vowed immediate retaliation if Trump proceeds.

Adding to the complexity, it remains unclear whether Trump’s proposed reciprocal tariffs, set to take effect in April, will be implemented separately or combined with existing tariffs on Canada, Mexico, and China, as well as the looming EU tariff.

For the premium cigar industry, these tariffs could have a significant impact, as Canada, Mexico, and the EU remain critical export markets for domestic manufacturers. Any tariff increases are expected to disrupt pricing and distribution, while retaliatory measures from these trade blocs will likely further impact premium cigars.

Given the fluid nature of these trade policies, CRA is actively monitoring developments and will continue to provide timely updates on potential impacts to the premium cigar industry.