Updated late Friday with planned 250% tariffs on milk and lumber from Canada
Electronics industry officials praised President Trump’s postponement of 25% tariffs on a wide range of goods sent from Canada and Mexico to the US that are covered in the United States-Mexico-Canada Agreement (USMCA) negotiated by Trump in his first term.
The president set a nearly one month pause to April 2 after speaking with Mexican President Claudia Scheinbaum on Thursday and negotiations between Canadian and Trump administration officials. The decision followed Trump’s pause on tariffs affecting automobiles after he spoke with executives from Ford, GM and Stellantis on Wednesday. Autos are included in the USMCA group of compliant goods, although energy from Canada is not included in the USMCA.
Later Friday, Trump appeared ready to change course, however, saying he would impose steep 250% tariffs on milk and lumber from Canada coming to the US to match the tariff Canada charges the US for those goods.
“President Trump’s decision to postpone tariffs on goods covered by the United States-Mexico-Canada Agreement is the right move for building strength and resiliency in electronics,” said John Mitchell, CEO of IPC, a global industry association with 3,200 member companies focused primarily on electronics design, printed board manufacturing, assembly and testing. He expressed willingness to work with the president on his domestic manufacturing agenda.
Prior to the postponement, the 25% tariffs on all imported goods from Canada and Mexico took effect on Tuesday, March 4, and were defended by the president in an address to Congress that evening. China also saw a 10% added tariff on March 4, which has not been paused.
Electronics are key components in modern vehicles and other devices with hundreds of electronics component suppliers and assemblers located in the three countries. Some vehicle components cross national borders up to six times before final assembly, and the tariffs would be invoked each time a vehicle or other product like a smartphone or laptop or kitchen microwave entered the US.
IPC noted that 10% of all trade with Canada and Mexico in 2024 was in electronics, totaling $184 billion. Nearly one-third of all US electronics exports went to Canada and Mexico in 2024 totaling about $80 billion.
Mitchell said the North America electronics industry is “deeply connected” with PCBs, semiconductors and wiring harnesses crossing borders multiple times before final assembly. Nearly 78% of US electronics imports from Mexico and 47% of exports occur within what he called “intra-firm” trade, while 50% of electronics imports from Canada and 40% of exports are intra-firm between parties making final products.
“Imposing these tariffs discourages investment, disrupts supply chains and risks pushing manufacturers out of North America,” Mitchell said. “Electronics are the backbone of innovation in AI, automotive, healthcare, and the national and economic security infrastructure.”
By contrast, President Trump has repeatedly said he “loves tariffs” and sees them as a means of encouraging companies to build manufacturing facilities in the US. The tariffs on Mexico and Canada are specifically meant to curb the flow of illegal fentanyl into the US, as the White House laid out in a recent fact sheet. Canada has promised retaliatory tariffs and has pledged to stop selling any US goods in Canadian stores.
In his congressional address, Trump mentioned how tariffs have already encouraged companies such as Apple and TSMC and a Stargate partnership involving Softbank, OpenAI and Oracle to announce plans to spend $1.7 trillion on manufacturing in the US in coming years. The president also admitted tariffs were unpopular and could cause some pain with temporary increases in prices.
Commerce Secretary Howard Lutnick defended the tariffs again in a statement on Thursday, reacting to the negative impact tariffs have had on stock markets. “The fact that the stock market goes up or down a half percent every day is not the driver of our outcomes,” Lutnick said. “Our outcomes are driven by: We want factory production in America, we want employment to blossom in America, we want to train for the new AI industrial revolution to happen in America, we’re going to bring factories back to America.”
CNN reported Trump blamed “globalists” for recent market declines during an Oval Office signing ceremony on Thursday. “I think it’s globalists who see how rich our country is going to be and they don’t like it,” Trump said. “It’s a big market out there. But again they’ve been ripping off this country for years, and they’re going to do great, but we can’t let this continue to happen to American any more. Otherwise we’re not going to have a country any more.”
IPC’s Mitchell concluded his statement with willingness to work with the Trump administration on its domestic manufacturing agenda: “A strong domestic electronics industry is essential to maintaining US leadership in many critical sectors. Tariffs on key trading partners and inputs like aluminum, steel, and copper will drive up costs, create uncertainty, and weaken a fragile U.S. electronics industry as other nations continue to invest and advance. IPC is eager to work with President Trump on his domestic pro-growth, pro-manufacturing agenda to build a stronger, more resilient industrial base.”