Amendment to Duties To Address the Flow of Illicit Drugs Across Our Northern Border
This executive order amends an earlier 2025 order that imposed extra tariffs on certain Canadian imports to pressure Canada to do more to stop illicit drug flows (notably fentanyl) across the U.S.–Canada border. It raises the additional ad valorem duty (a percentage tariff based on the value of the goods) on the Canadian products that had been subject to a 25% surcharge to 35%, effective for goods entered or withdrawn for consumption on or after 12:01 a.m. EDT on August 1, 2025. The order also strengthens anti‑circumvention measures (higher duties and penalties for transshipped goods), continues monitoring and interagency coordination, and delegates authority to implement the order to the Secretary of Homeland Security. The practical effects are: higher costs for importers and likely higher prices for affected U.S. buyers of those Canadian products; increased enforcement activity by Customs and Border Protection (CBP) and other agencies; and an elevated trade‑policy pressure point between the United States and Canada that could affect bilateral trade and provoke diplomatic or retaliatory steps.
Key Points
- 1Tariff increase: All Canadian products that were subject to the 25% additional ad valorem duty under Executive Order 14193 (as amended) are now subject to a 35% additional ad valorem duty. The Harmonized Tariff Schedule of the United States (HTSUS) will be updated in an annex to reflect this.
- 2Effective date: The increased rate applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 1, 2025.
- 3Transshipment and evasion: Goods from Canada that do not qualify as originating under USMCA and that CBP determines were transshipped to evade the new duties will face an even higher additional duty of 40%, plus any applicable penalties (including under 19 U.S.C. 1592) and any other duties/fees. CBP is directed not to allow mitigation or remission of penalties for such evasion.
- 4Reporting and lists: Every six months the Commerce and Homeland Security Secretaries, working with CBP and the U.S. Trade Representative, must publish a list of countries and specific facilities used in circumvention schemes (intended to inform procurement, security reviews, and due diligence).
- 5Implementation and authority: The Secretary of Homeland Security, in consultation with Treasury, Commerce, and the Attorney General, is authorized to implement the order and use the powers Congress granted the President under the International Emergency Economic Powers Act (IEEPA). The order preserves prior USMCA exemptions and the stacking rules from Executive Order 14289.