January 21, 2025
No Day 1 Tariffs from Trump; Canada, Mexico in Focus Feb 1
President postpones tariff, keeps 25% in sight, while ordering global trade review
President Donald Trump stepped back from his campaign promise to impose immediate tariffs on Canada and Mexico as he assumed office yesterday, opting instead for a measured approach.
No tariffs were enacted on his first day, but President Trump signed a memorandum directing the Departments of Commerce and Treasury to investigate trade-related issues. He also announced that he was considering imposing tariffs on imports from Canada and Mexico starting February 1.
In November, then-candidate Trump took to social media to declare his intention to impose a 25% tariff on goods from Canada and Mexico on his first day in office. The announcement aligned with his campaign messaging that targeted open borders and trade deficits as threats to American economic security.
As president, Trump has the unilateral authority to impose tariffs under certain conditions, prompting speculation of immediate action. However, the anticipated sweeping changes did not materialize on day one, offering a reprieve to trade partners and industries – including the lighting industry that relies heavily on China, Mexico and Canada.
Key Developments on President Trump’s First Day
No Day-One Tariffs. February 1?
Despite earlier threats, President Trump did not enact 25% tariffs on Canada and Mexico. Numerous outlets reported that in Monday night remarks to reporters, President Trump stated that he is considering a 25% tariff on imports from Canada and Mexico starting February 1.
According to the Associated Press, Canadian Foreign Minister Mélanie Joly addressed the prospect of tariffs, stating, “We will continue to work on preventing tariffs” while also “working on retaliation.” Canada’s proactive stance signals a readiness to counter any trade restrictions imposed by the U.S.
Memo on "America First Trade Policy"
On his first day, Trump signed a memorandum outlining his administration’s goals for trade policy reform. Among its broader aims of reducing trade deficits and strengthening industrial capabilities, the memo details multiple measures tied to tariffs including:
- Investigating Trade Deficits: The Commerce Secretary will examine the causes of U.S. trade deficits and consider remedies, including global tariffs.
- New Tariff Collection System: The Treasury Department will explore creating an External Revenue Service (ERS) to streamline tariff and duty collection.
- Addressing China: U.S. officials will review agreements with China, evaluate compliance, and potentially impose new tariffs to counter intellectual property and supply chain violations.
The memo cites an April 2025 deadline for completing these investigations and making recommendations.
Looking ahead
The lighting industry, which relies heavily on manufacturing in Mexico and China, has been bracing for potential cost increases following threats made by former President Trump in November. The two largest U.S. lighting manufacturers, Acuity Brands and Signify, are particularly reliant on Mexican factories. Additionally, other brands depend on Mexican-sourced finished goods and components. A significant portion of architectural lighting products also enters the U.S. from various Canadian manufacturers.
For now, the industry has received a reprieve. However, indications suggest that this issue may resurface in the near future.
