Imposing Duties To Address the Flow of Illicit Drugs Across Our Northern Border

Feb 7, 2025

Summary

Adds extra taxes to goods from Canada to pressure their government to help stop the flow of illegal drugs into the United States.

What problem does this solve?

Illegal drugs like fentanyl are entering the U.S. from Canada, creating a public health crisis that the Canadian government has not done enough to stop. This order adds taxes to Canadian goods to force Canada to take more action against drug trafficking.

What does this order do?

Adds a 25% tax on most Canadian goods

Places a new 25 percent ad valorem duty, which is a tax based on the item's value, on almost all products imported from Canada.

Sets a 10% tax on Canadian energy

Applies a lower 10 percent ad valorem duty on energy and energy resources that are imported from Canada.

Expands a national emergency to the northern border

Broadens a previously declared national emergency to include the threat of illicit drugs and human trafficking from Canada, citing Canada's failure to act.

Ends a tax-free rule for small packages

Removes the 'de minimis' rule for taxed Canadian goods, meaning even low-value shipments will be subject to the new duties.

Allows for higher taxes if Canada fights back

Authorizes the President to increase the new duties if Canada responds by placing its own taxes on U.S. exports.

Creates a way to remove the taxes

States the taxes will be removed once the President decides that Canada has taken enough steps to help solve the public health crisis through cooperative actions.

Who does this affect?

Importers of Canadian goods
Canadian businesses
U.S. consumers

What is the real world impact?

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Pressures Canada to increase drug enforcement

Uses economic tariffs as a tool to force the Canadian government to cooperate more with U.S. law enforcement and take stronger action against drug trafficking organizations operating within its borders.

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Raises costs for Canadian goods

Could be seen as a protectionist trade policy that uses national security as a reason to tax imports from a major trading partner, potentially harming diplomatic relations and increasing prices for U.S. consumers.

When does this start?

The new taxes on Canadian goods take effect on February 4, 2025, with some exceptions for items already being shipped.

New duties begin

The 25% and 10% duties apply to Canadian goods entered for consumption on or after 12:01 a.m. eastern time on February 4, 2025.

Goods in transit are exempt

Goods that were already on their way to the U.S. before 12:01 a.m. eastern time on February 1, 2025, are not subject to the new duties.

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E.O. 14197 - Progress on the Situation at Our Northern Border