President Donald Trump responds when he speaks to members of the South Lawn media on February 28, 2025, before riding in the Marines in the White House in Washington, D.C.
Nathan Howard | Reuters
US importers and their customers are looking to experience the full power of President Donald Trump’s unprecedented use of emergency economic forces.
In the middle of Tuesday, a 25% tariff on imports from America’s top two trading partners, Canada and Mexico, was enforced, adding a 10% tariff on Chinese imports. Tariffs on Canada’s energy began at a 10% rate in the middle of the night Tuesday.
It is difficult to exaggerate how far these tariffs are, or how quickly they feel.
Trade between the US and Mexico, Canada and China in 2024 accounted for around 40% of the total US commerce around the world.
And unlike traditional trade policies, these tariffs are designed to quickly bring financial stabs, trade experts told CNBC.
“From a technical standpoint, tariff levies are basically a light switch. They are on or off,” said Daniel Anthony, president of Trade Partnership, a policy research firm.
Literally overnight, the cost of importing lime worth $100,000 from Mexico, for example, increased by $25,000 on Tuesday. This is the money importers need to pay directly to US customs and border security when Lime crosses the border.
Experts say consumers will bear the brunt of tariffs at higher prices. The Tax Policy Center estimates that Trump’s Mexico and Canada tariffs alone will cost an average household $930 a year by 2026.
Target CEO Brian Cornell told investors on Tuesday that shoppers could see prices rise within days as a result of tariffs on Mexican fruits and vegetables.
Even if Glitch prevented the collection of tariffs from Tuesday’s ET’s exact 12am, they can still be tallied and importers can expect to receive the tax bill retroactively, according to Nicole Bivens Collinson, a Washington trade lobbyist and principal of Sandler Travis & Rosenberg.
“It’s like when you get your Uber bill and forget you’re leaning and then add it later,” she said.
In addition to two new North American tariff rates, Trump also signed an order on Monday to double the previous 10% tariff on imports from China.
Canada, China and Mexico account for US foreign trade worth $2.2 trillion in 2024, according to federal census data. About $840 billion of that came from $762 billion from trade with Mexico, Canada’s imports and exports and $582 billion from China.
Extraordinary power
Containers at the Port of Vancouver, Vancouver, British Columbia, Canada, February 28, 2025.
Ethan Cairns/Bloomberg via Getty Images
The imposition of a massive new tariff is a sharp reminder of how much power Trump will wield global commerce.
However, it also suggests the limits of this power.
Part of the reason Trump can impose tariffs so quickly is because the White House is invoking sweeping national security laws to justify new taxes.
Until now, Ieepa, the International Emergency Economic Force Act, was primarily used to impose emergency sanctions on groups of suspected foreign dictators or terrorists.
However, the Trump administration argues that illegal global fentanyl trade and immigration at the Mexican border are both seen as “an extraordinary and extraordinary” foreign threats to American national security and justifies Trump’s use of emergency under the IEEPA.
Trump has used the law in a broader way than before, the Worldwide Trade Partnership said.
By pushing the boundaries of presidential authorities, Anthony said Trump is bringing legal challenges.
And urgently implementing such a wide range of orders is not without its complications.
In the case of so-called minimum shipments, the Trump administration imposed a new tax on millions of cargo entering the United States before the federal government had the means to actually collect fees.
De Minimis Mess
Oscar Wong | Moment | Getty Images
“de minimis” imports are international shipping for under $800. Historically, these low-value person-to-person imports have been exempt from US customs duties.
Some of the world’s largest e-commerce companies take advantage of minimal loopholes by shipping their products directly to consumers from overseas.
First fashion sites like Temu and Shein ship products directly from China to American consumers. They have helped in recent years to promote explosions with minimal US-bound shipping.
However, collecting customs duties on minimal items is more difficult than it looks.
“Colinson, who previously served as a US trade negotiator, said, “But this system does not exist in de Minimis imports,” she added.
In 2024 alone, the US accepted over 1.3 billion foreign cargo, according to federal data.
Experts said the federal government will need to hire more customs agents to handle many new shipments.
Nevertheless, in early February, Trump announced that the US would begin collecting tariffs on low-value shipments from overseas.
Trump’s order gave the US postal service just a few days to implement a system that starts collecting tariffs in millions of small packages each day.
It also caused confusion throughout the international postal system, culminating in February 4th with the announcement that USPS had suspended all parcel delivery services from China and Hong Kong “until further notice.”
A day later, the postal service reversed the course and resumed processing of De Minimis Parcels. But it did not collect tariffs on them.
Shortly afterwards, the Trump administration announced an amendment to the Chinese order, “formally delaying efforts to collect tariffs on minimum imports, and the right systems will be set up until “the appropriate system will be fully and properly handled and the tariff revenue will be collected.”
The US Postal Service did not immediately respond to requests for comment.
On Sunday, the White House introduced similar De Minimis exemptions in Canada and Mexico before imposing a new 25% tariff.
It is unclear when the minimum tariff collection system is in operation.
A U.S. Customs and Border Protection spokesperson told CNBC: “The dynamic nature of our mission, along with evolving threats and challenges, requires CBP to adapt quickly while maintaining flexibility, ensuring seamless operation and mission resilience.”
However, Anthony pointed out that China’s delays are “open-ended.”
“Part of the challenge is [federal] People and bandwidth, customs and border protection may not be able to use staff and resources to handle new cargo and packages, he said.
The experts also said the authorities will need to decide how taxes will be assessed and paid, and how customs officials will handle the tens of millions of new data points provided by shippers for each individual package.
“Everyone can develop a good policy, but it’s important to know if that policy can actually be effective,” Collinson said.
