On March 3, the Trump administration announced that previously delayed tariffs on U.S. trading partners Canada and Mexico would in fact take effect March 4. The update came after a month-long pause on the 25% tariffs that President Trump had previously threatened. After the White House received a call from Mexican President Claudia Sheinbaum, the Trump administration once again paused the tariffs on Canada and Mexico, allowing exemptions for products that are qualified under the United States-Mexico-Canada Agreement (USMCA), a trade agreement introduced and signed by President Trump in his first term of office. The USMCA replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020.
The short-lived implementation of tariffs came after Sheinbaum and Canadian Prime Minister Justin Trudeau committed to providing additional border security, terms that Trump had asked to be met. Additionally, leaders in both countries claim the current administration’s actions violated the USMCA.
On March 6, the Trump administration announced the most recent pause on the wide-sweeping tariffs, with no explicit expiration date being given at this time. Trump also added that he still intends to impose reciprocal tariffs starting April 2.
The continually evolving trade war is leaving many in the propane industry with questions about how tariffs are impacting their own business. This confusion is reflected on a broad scale in the stock market, with the stock market S&P 500 dropping 2% since the most recent string of back-and-forth tariff announcements.
On March 5, the National Propane Gas Association (NPGA) hosted an informational webinar on the then-current status of tariffs. When speaking about the concept of reciprocal tariffs, legal expert Micah Myers said the following:
“It’s a massive change in the way the U.S. does tariffs. Since World War II, we’ve had the concept that tariffs are MFN [most favored nation]. Products are subject to the same rate, regardless of which country they’re coming from. This would be a real sea change in the way U.S. tariffs work and essentially a reversion to the pre-World War II way tariffs were done.”
Speaking about the recent update for USMCA exemptions in an NPGA Member Alert, NPGA stated that “the USMCA rules of origin are fairly complicated and can be found in 19 CFR Part 182 Appendix A.”
NPGA also advised concerned businesses to maintain their own legal counsel during this time in order to best determine their course of action and whether their products meet USMCA stipulations.
For more resources on how to navigate tariffs, take a look at NPGA’s newly created Tariff Information Center.
BPN will continue to provide updates on tariffs in the coming weeks.
