U.S. President Donald Trump addresses the Conservative Political Action Conference (CPAC) annual meeting in National Harbor, Maryland, U.S., February 22, 2025.
Brian Snyder | Reuters
U.S. importers and their customers are about to experience the full force of President Donald Trump’s unprecedented use of emergency economic powers.
To that point, 25% tariffs on imports from America’s top two trading partners, Canada and Mexico, went into effect at midnight Tuesday, as did an additional 10% tariff on Chinese imports. Canadian energy will be tariffed at a lower rate of 10%, also as of midnight Tuesday.
It’s difficult to overstate how far-reaching the impact of these tariffs will be, or how quickly they will be felt.
U.S. trade with Mexico, Canada and China last year accounted for around 40% of America’s total commerce in goods around the world.
And unlike traditional trade policy, these tariffs are designed to deliver a financial sting right away, trade experts told CNBC.
“From a technical standpoint, the imposition of the tariffs is basically a light switch. They’re on or they’re off,” said Daniel Anthony, the president of Trade Partnership Worldwide, a policy research firm.
Literally overnight, the cost of importing, for example, $100,000 worth of limes from Mexico increased by $25,000 Tuesday. This is money that the importer will need to pay directly to U.S. Customs and Border Protection when the limes cross the border.
Even if a glitch prevented tariffs from being collected starting at exactly 12:01am Eastern Time Tuesday, they would still be tallied, and importers could expect to receive a tax bill retroactively, said Nicole Bivens Collinson, a Washington trade lobbyist and managing principal at Sandler, Travis & Rosenberg.
“It’s like when you get an Uber bill and you forgot to tip, and add it on later,” she said.
Along with the two new North American tariff rates, Trump also signed an order Monday doubling his earlier 10% tariff on imports from China, for a total 20% additional tariff rate on the nation.
Taken together, Canada, China and Mexico accounted for $2.2 trillion worth of U.S. overseas trade in 2024, according to federal census data. About $840 billion of that came from trade with Mexico, $762 billion from Canadian imports and exports and $582 billion from China.
Extraordinary power
Container at the Port of Vancouver in Vancouver, British Columbia, Canada, on Feb. 28, 2025.
Ethan Cairns/Bloomberg via Getty Images
Part of the reason Trump could do this so quickly is because the White House is invoking a sweeping national security law to justify the new levies.
Until now, the International Emergency Economic Powers Act, IEEPA, had been used mainly to impose emergency sanctions on foreign dictators or suspected terrorist groups.
But the Trump administration argues that the illicit global fentanyl trade and immigrants at the Mexican border both qualify as “unusual and extraordinary” foreign threats to American national security, justifying Trump’s use of emergency powers under IEEPA.
Trump is using the law in a broader way than any president has before, Trade Partnership Worldwide’s Anthony explained.
Trump is also inviting legal challenges, he said, by pushing the boundaries of presidential authority.
For now, consumers will bear the brunt of the tariffs in higher prices, experts say. The Tax Policy Center estimates that Trump’s Mexico and Canada tariffs alone will cost the average household an additional $930 a year by 2026.
The imposition of massive new tariffs on U.S. imports from Canada, China and Mexico are a sharp reminder of how much power Trump wields over global commerce.
But they also hint at the limitations of this power.
In the case of so-called de-minimis shipments, the Trump administration imposed new levies on millions of shipments entering the United States, before the federal government had the means to actually collect the fees.
The de minimis mess
Oscar Wong | Moment | Getty Images
So-called “de minimis” imports are international shipments valued at $800 or less. Historically, these low-value, person-to-person imports have been exempt from U.S. tariffs.
Several of the world’s biggest e-commerce companies take advantage of the de-minimis loophole by shipping their products directly to consumers from overseas.
Fast fashion sites, like Temu and Shein, ship goods directly from China to American consumers. They have helped fuel an explosion in U.S.-bound de-minimis shipments in recent years.
But collecting tariffs on de-minimis goods is harder than it looks.
“There’s a whole infrastructure system set up for normal shipments that come in to the country,” said Collinson, who previously served as a U.S. trade negotiator. But this system doesn’t exist for de-minimis imports, she added.
Last year alone, the U.S. accepted more than 1.3 billion overseas shipments that qualified for de-minimis tariff exemptions, according to federal data.
To process that many new shipments, the federal government will need to hire more customs agents, experts said.
Nonetheless, in early February Trump announced that the United States would begin collecting tariffs on low-value shipments from overseas.
Trump’s order gave the U.S. Postal Service mere days to implement a system to begin collecting tariffs on millions of small packages every day.
It also sowed chaos throughout the international postal system, culminating on Feb. 4 with an announcement that USPS had suspended all parcel delivery services from China and Hong Kong “until further notice.”
A day later, the postal service reversed course and resumed processing the de-minimis parcels. But it did not collect any tariffs on them.
Soon after, the Trump administration issued an amendment to the China order, formally delaying any effort to collect tariffs on de-minimis imports until “adequate systems are in place to fully and expediently process and collect tariff revenue” on them.
The U.S. Postal Service didn’t immediately respond to a request for comment.
A month later, the White House put similar de-minimis waivers in place Sunday for Canada and Mexico, ahead of imposing the new 25% tariffs.
It’s unclear when a de-minimis tariff collection system might be up and running.
A U.S. Customs and Border Protection spokeswoman told CNBC, “The dynamic nature of our mission, along with evolving threats and challenges, requires CBP to remain flexible and adapt quickly while ensuring seamless operations and mission resilience.”
But Anthony noted that the delay for China was “open ended.”
“Part of the challenge is [federal] personnel and bandwidth,” he said. Customs and Border Protection may not have the staff or resources available to handle the new volume of shipments and packages, he said.
Officials must also determine how the levy will be assessed and paid, and how customs officials will process tens of millions of new data points furnished by shippers for each individual package, the experts said.
“Anyone can develop a good policy, but whether that policy can actually be effectuated is critical,” Collinson said.
A Social Security Administration (SSA) office in Washington, DC, March 26, 2025.
Saul Loeb | Afp | Getty Images
A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.
Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.
The complaint was filed in the U.S. District Court for the District of Columbia.
The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities,Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.
“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.
In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.
“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.
The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.
With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.
The Social Security Administration did not respond to CNBC’s request for comment.
“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”
Lawsuit alleges reform is ‘administrative vandalism’
People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025.
Nathan Layne | Reuters
The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.
DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.
Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.
The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.
The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14.
The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.
“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.
Beneficiaries face long waits, overpayment issues
The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.
One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.
Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.
Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.
Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.
Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person.
Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.
The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.
Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market.
But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.
“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”
Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.
Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.
“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.
Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.
“Taking action is the best way to feel more resilient,” she said.
It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity fordollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.
This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.
Timing the market is a losing bet
Talk yourself down from making any sudden financial moves, Chatzky advised.
Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.
For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.
And, although stocks go up and down, the S&P 500 index has an average annualized return of around 10% over the past few decades.
Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.
As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agency’s latest reporting shows.
However, the federal tax deadline for the majority of taxpayers is April 15. It’s possible to push that due date to Oct. 15 by filing for an extension.
But “it’s an extension to file, not an extension to pay,” said Jo Anna Fellon, managing director at financial services firm CBIZ.
“It’s an extension to file, not an extension to pay.”
After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.
That’s cheaper than the failure-to-file penalty, which applies when you don’t submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.
But you’ll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.
You can estimate your taxes owed by creating a “pro forma return” — or mock version of your filing — using as many tax forms as possible, Fellon said.
The ‘easiest way’ to file an extension
There are a few free options to file a tax extension.
For federal taxes, you can complete Form 4868 and mail it to the IRS. But it’s better to file digitally to avoid processing delays amid the agency’s shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.
The “easiest way” is by choosing “extension” when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
“It takes all of five minutes,” and you can double-check the transaction via your IRS online account, he said.
IRS Direct Pay
Internal Revenue Service
Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.
For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But there’s no income limit to file an extension, Lucas said.