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The Purchasing and Contract Management Offices are closely monitoring recent trade developments that may affect procurement. On February 1st, 2025, President Trump signed Executive Orders that will impose new tariffs on imports from Canada, Mexico, and China. These tariffs will include:

• A 25% tariff on goods from Canada
• A 25% tariff on goods from Mexico
• A 10% tariff on goods from China
• A 10% tariff on Canadian energy exports

These new tariffs do not contain exemptions for specific commodities, and the new tariffs will not qualify for duty-free de minimis treatment (i.e. exemption below a certain $ threshold) under Section 321, and duty drawback will not be available. The tariffs will remain in effect indefinitely, with the possibility of further increases if retaliatory measures are implemented (Canada has already advised they will be implementing their own tariffs in response). The tariffs will likely have impacts beyond goods purchased directly from Canada, Mexico, and China, because goods being purchased from other countries (including the U.S.) often include materials from Canada, Mexico, and China as part of the supply chain, so those goods may see price increases as well.

****What This Means for University Purchases****

We encourage departments to:

• Evaluate Budgets: Assess the potential budget implications for upcoming purchases, especially for specialized equipment (e.g. in Physics, Fermilab, and other research intensive units) both from direct purchases and indirect supply chain impacts
• Consider Stockpiling: Confirm with vendors whether goods are in the U.S. or already in transit to the U.S. since shipments in the U.S. before 12:01 a.m. on February 1st or that were in transit to the U.S. before that date and time are exempt from the new tariffs. Units should consider stockpiling goods that meet those criteria where possible and appropriate. 
• Assess Purchase Timelines: Review pending purchases (in particular large dollar purchases) that could be impacted by the tariffs (either directly or indirectly) and carefully assess the timeline for those purchases, weighing potential deferral against the possibility of future increases.
• Explore Alternatives: Explore alternatives to purchases being imported from Canada, Mexico, and China, where possible and appropriate.
• Stay Informed: Stay informed as the situation develops.

We will continue to monitor the situation and provide updates as needed.

Contact

If you have any questions or need assistance, please feel free to contact the UIUC Purchasing and Contract Management Office at urbanapurchasing@uillinois.edu or 217-333-3505.