As everyone knows, President Trump has moved forward with a 25% tariff on goods imported into the U.S. from Canada and Mexico. There are many outstanding questions relating to how these tariffs will be imposed and how they will operate. NAEDA has been researching the tariffs and will continue updating dealers with FAQs in the near future. For now, we want to provide an overview of information relevant to your business.
How Tariffs Are Applied
The 25% tariffs went into effect on all goods being imported from Canada and Mexico as of 12:01 a.m. March 4, 2025. These are universal tariffs on all products with very limited exceptions. Farm, industrial, and outdoor power equipment are not exempted from the tariffs and will be subject to a 25% tariff on the total value of the product being imported. This will apply to new and used equipment crossing the border.
Tariffs are collected at the time of importation at a U.S. port of entry. U.S. Customs and Border Protection (USCPB) are responsible for collecting the 25% tariff at the time of crossing. The importer of record will be the one who pays the 25% tariff. This means dealers purchasing equipment coming from the U.S. or Mexico will be the importer of record and be required to remit payment to USCPB before the products are allowed entry.
These duties will also apply to parts and additional duties will be imposed on the value of repairs, alterations, and processing when performed in Canada or Mexico for equipment under warranty. USCPB has published guidance documents for additional duties on goods imported from both countries:
CANADA GUIDANCEÂ Â Â Â Â Â Â Â Â MEXICO GUIDANCE
Customs Broker
Because of the complexity and values of imports dealers are considering, NAEDA is recommending that dealers work with customs brokers who are adept at navigating the mechanics of paying tariffs. We have talked with several customs brokers in our research to understand how tariffs are applied and it is clear that dealers should find a reputable brokerage firm to facilitate their shipments of equipment from either Canada or Mexico. Customs brokers are able to set up accounts for pre-payment of duties owed and have processes in place to declare goods on behalf of dealers that will greatly speed up the process and eliminate confusion for dealers.
Brokerage firms do come at a cost based on many variables and we have been unable to quantify a ballpark figure for estimations of increased costs. With the tariffs being imposed on virtually all products, custom brokers will be very busy trying to meet increased demand for their services, so we encourage dealers to contact them early in advance of any planned shipments.
Order Recourse
Some dealers may be considering cancelling orders in response to 25% tariffs. We want to make sure dealers are aware that order recourse may be subject to the dealer agreement, specific terms and conditions of individual orders, and potentially third- party financing agreements. Scenarios are too numerous to cover every issue here, but we want dealers to be aware of these before placing orders to discuss these terms with manufacturers and provide dealers with as much flexibility as possible to make the best decisions for their business.
NAEDA will continue updating dealers with information and resources as it becomes available. Please do not hesitate to contact your association office with any questions or information you have about how tariffs are impacting your dealership.
