Last week I reported (story #1) that President Donald Trump announced significant tariff measures affecting imports from Mexico, Canada, and China. Trump originally announced that the US would implement a 25% tariff on goods from Canada and Mexico and a 10% tariff on Chinese imports, effectively immediately — but that quickly changed.
As I was putting together my newsletter last week, it was announced that Trump paused the Mexico tariffs for one month after Mexican President Claudia Sheinbaum agreed to immediately send 10,000 soldiers to her country’s border to prevent the trafficking of fentanyl and other drugs. Then, shortly after sending the newsletter, it was announced that Trump also agreed to pause the Canadian tariffs for at least 30 days after Prime Minister Justin Trudeau made a similar pledge.
Here's what's happened since:
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February 4th: The new Chinese tariffs and the removal of the de minimis exemption took effect, leading to disruptions in customs processing and concerns among e-commerce platforms that relied on the exemption to offer low-priced goods.
- February 4th: The USPS abruptly placed a ban on all inbound packages from China and Hong Kong last Tuesday after the US imposed its 10% tariff on Chinese goods and ended the de minimis loophole, but then USPS reversed course the next day without giving a reason. The postal service instead said it would work with Customs and Border Protection to implement a collection process for the new China tariffs to avoid delivery disruptions.
- February 5th: Temu began almost exclusively showcasing local products to American consumers that are warehoused and sourced in the US, which is a very different assortment than what most people have come to expect on the platform. The product results have since returned to normal, featuring goods fulfilled from China. Wired reported that both Shein and Temu began increasing prices by as much as 50% after the news broke.
- February 6th: Chinese retailers were asked by logistics agents to start paying an additional 30% levy in the form of a deposit, which agents said they would partially return depending on the actual tax charge from US customers.
- February 7th: In response to the operational challenges and backlog at US customs, President Trump signed an order delaying the removal of the de minimis exemption, allowing the Commerce Department time to establish procedures for processing and collecting tariffs on low-value packages from China.
- February 9th: Trump announced that he will introduce a new 25% tariff on all steel and aluminum imports into the US, on top of existing metals duties. He also said he will announce reciprocal tariffs on Tuesday or Wednesday this week, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country.
- February 10th: The announcements of the tariffs have caused fluctuations in global markets. For instance, the Indian rupee opened significantly weaker today, reaching an all-time low against the US dollar. Similarly, the Australian stock market experienced a $15B loss in just one hour after Trump announced sweeping tariffs on steel and aluminum. Prime Minister Anthony Albanese scheduled a call with Trump to lobby for Australia to be exempt from the tariffs.
- February 10th: China's promised 15% tariffs on US products including LNG, coal, and agricultural equipment are set to be imposed today in response to Trump's 10% levy. Beijing announced the measures last Tuesday after Trump's 10% tariffs were implemented.