Administration Delays Some Tariffs on Mexico, Canada

Days after implementing 25% tariffs on Mexico and Canada, the Trump administration granted a number of exemptions. 

The administration said March 6 it will pause tariffs on goods from Mexico and Canada that are covered by the United States-Mexico-Canada Agreement until April 2. 

President Donald Trump signed the USMCA free trade agreement in 2018 during his first term in office, and is slated to be up for review in 2026. 

Administration officials said about 50% of imports from Mexico and about 36% of imports from Canada are covered under the agreement. 

The tariff exemptions will not be retroactive. Officials said tariffs already paid will not be refunded. 

The announcement comes after the administration had already granted automakers a one-month exemption from tariffs after industry officials warned of the steep implications. 

“The exemptions are a positive for many businesses in Connecticut,” said Chris DiPentima, president and CEO of CBIA. 

“Unfortunately, this temporary pause continues the cycle of unpredictability. One month is not enough runway for business leaders to prepare for the upheaval to the supply chain.”

China Tariff Talks 

The Trump administration still moved ahead with the additional 10% tariff on Chinese goods March 4. 

It was the second time the U.S. raised tariffs on imports from China since late January.

The Trump administration levied 10% penalties on goods from China in early February. 

The Trump administration still moved ahead with the additional 10% tariff on Chinese goods March 4. 

China retaliated almost immediately, levying tariffs on $21 billion worth of American agricultural and food products and placed export and investment curbs on 25 U.S. firms.

China was also hit with sanctions last year by the Biden administration, which doubled duties on semiconductors to 50% and quadrupled electric vehicle tariffs to more than 100%.

Chinese commerce minister Wang Wentao said China is open to resolving differences over trade. 

Trade Impacts 

Canada, Mexico, and China account for more than a third of the products brought into the U.S., supporting tens of millions of American jobs. 

This includes hundreds of thousands of jobs in Connecticut.

Officials from the National Association of Manufacturers said 25% tariffs on Canadian and Mexican goods would add an estimated $144 billion annually to the cost of manufacturing in the U.S.

Trade between the U.S. and Mexico hit $839.9 billion in 2024, including $334 million in U.S. exports.

“This temporary pause continues the cycle of unpredictability. One month is not enough runway for business leaders to prepare for the upheaval.”

CBIA’s Chris DiPentima

U.S. companies exported $349 billion in goods to Canada last year, with overall trade between the two countries increasing to $762.1 billion.

U.S. companies shipped $143.54 billion in goods to China in 2024 and imported $438.95 billion in products from that country.

China imported $24.7 billion in U.S. farm products, 14% of the total U.S. $176 billion in agricultural exports. Mexico was the largest importer of U.S. farm goods, followed by Canada.

Connecticut Impact

Canada and Mexico are also Connecticut’s largest trading partners, with tariffs and retaliatory sanctions representing a particular threat to the state’s manufacturing sector.

Connecticut commodity sales to Canada increased $189 million to $2.3 billion in 2024, with aerospace components representing about 20% of all shipments.

Canada accounted for $5.74 billion of the $22.74 billion in goods the state imported in 2024.

Connecticut exports to Mexico rose $596 million last year to $1.67 billion, while Connecticut imported $3.6 billion in goods from that country.

China is Connecticut’s fourth leading export destination, with exports jumping $468 million to $1.46 billion last year.

Imports from China have declined $954 million (-41.5%) since the USCMA took effect in 2018, while Canadian imports increased $2.16 billion (60%) and Mexican imports grew $1.11 billion (44%).

Transportation equipment, including aerospace components, represented the greatest share of Connecticut’s exports last year at $6.21 billion, up 15.2% from 2023.

Aerospace is also Connecticut’s leading manufacturing sector, with annual output exceeding $13.8 billion in goods—40% of all manufacturing production.