Amendment to Duties To Address the Flow of Illicit Drugs Across Our Northern Border
1. Purpose
Executive Order 14325 enhances measures against illicit drug trafficking by adjusting duties on certain Canadian goods, following a national emergency declaration due to a public health crisis involving drugs like fentanyl.
2. Key Actions And Directives
- Increase in Ad Valorem Duty: The ad valorem rate on specific products from Canada is raised from 25% to 35%.
- Implementation of Additional Duties: Canadian products transshipped to circumvent duties face a 40% additional ad valorem duty.
- Monitoring Responsibilities: The Secretary of Homeland Security will oversee border conditions and report to the President on Canada's compliance.
3. Important Points
- New Duty Rates: Effective August 1, 2025, certain Canadian goods will incur a 35% ad valorem duty, up from 25%.
- Transshipment Penalties: Goods from Canada not qualifying under USMCA and transshipped to evade duties will face severe penalties.
- Severability Clause: Section 6 ensures that if any part of the order is invalidated, the remaining provisions will remain enforceable.
- Legal Authority: The order is grounded in constitutional and statutory powers, primarily IEEPA and the National Emergencies Act.
- Modification of Tariff Schedule: The Harmonized Tariff Schedule of the United States will be updated to reflect these new duty rates.
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