Amendment to Duties to Address the Flow of Illicit Drugs Across Our Southern Border
President Trump issued an executive order amending tariffs previously imposed on Mexican goods.
The order modifies the additional duties introduced in Executive Order 14194, specifically targeting automotive parts and components to minimize disruption to the US automotive industry and its workforce.
It reduces the tariff on certain articles entered duty-free under the USMCA and lowers the potash tariff to 10 percent.
The order emphasizes maintaining the US automotive industry's economic and national security significance and ensures that implementation aligns with existing laws and available appropriations.
Arguments For
Protecting US Automotive Industry: The order aims to prevent significant disruptions to the US automotive sector, a key source of employment and innovation, by adjusting tariffs.
Maintaining Supply Chains: Modifications to tariffs reduce the negative effects on North American auto supply chains, keeping production closer to home and boosting regional economic development.
Economic Stability: The amendment avoids an economic shock to US automotive industry, protecting jobs and preventing a major disruption to the national economy.
Legal Basis: The order cites the International Emergency Economic Powers Act, the National Emergencies Act, and sections of the Trade Act of 1974 and Title 3 of the US Code as legal justification.
Arguments Against
Potential Trade Retaliation: Mexico might respond with retaliatory tariffs, leading to trade war escalation and harmful economic consequences for both countries.
Limited Scope: The adjustments may not fully address underlying issues contributing to supply chain disruptions or adequately address concerns about illicit drugs.
Unforeseen Economic Impacts: The tariff adjustments might have unintended negative consequences on US consumers through higher prices or reduced product availability.
Alternative Approaches: Alternative measures such as targeted negotiations with Mexico or addressing the root issues through comprehensive trade policy could have been more effective.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), and section 301 of title 3, United States Code, I hereby determine and order:
Section 1. Background. Automotive production is a major source of United States employment and innovation and is integral to United States economic and national security. The American automotive industry as currently structured often trades substantial volumes of automotive parts and components across our borders in the interest of bringing supply chains closer to North America. In order to minimize disruption to the United States automotive industry and automotive workers, it is appropriate to adjust the tariffs imposed on articles of Mexico in Executive Order 14194 of February 1, 2025 (Imposing Duties to Address the Situation at Our Southern Border).
This section establishes the legal authority for the executive order, citing several US laws.
It then explains the rationale: the US automotive industry's importance to the economy and national security, and the need to adjust tariffs to prevent disruption caused by previous orders.
It highlights the focus on the flow of automotive parts and components across North American borders.
Sec. 2. Product Coverage. (a) Articles that are entered free of duty as a good of Mexico under the terms of general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS), including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the HTSUS, as related to the Agreement between the United States of America, United Mexican States, and Canada, shall not be subject to the additional ad valorem rate of duty described in section 2(a) of Executive Order 14194. (b) The additional rate of duty on potash that is not subject to subsection (a) of this section shall be reduced to 10 percent in lieu of 25 percent. (c) The modifications set out in this section shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on March 7, 2025.
This section details the specific tariff adjustments.
Subsection (a) exempts certain Mexican goods, those under general note 11 of the HTSUS and related to the USMCA, from additional tariffs.
Subsection (b) reduces the tariff on potash from 25% to 10%.
Subsection (c) sets the effective date for these changes.
Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive department, agency, or the head thereof; or (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. DONALD J. TRUMP THE WHITE HOUSE, March 6, 2025.
This section includes general provisions.
Subsection (a) clarifies that the order doesn't affect the authority of other government bodies.
Subsection (b) states that implementation is contingent upon available funds and legal compliance.
Subsection (c) is a standard clause limiting legal enforceability of the order.