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- Do The Trump Tariffs Impact EdTech?
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This weekend, a lot of online discussion has centered on the new tariffs imposed by the Trump Administration on goods from Canada, Mexico, and China.
Until the crisis [illegal immigration and drug importation, particularly fentanyl] is alleviated, President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff.
Keeping to our newsletter’s focus on EdTech, a very relevant question to address is whether these tariffs (to be enforced starting Tuesday) will impacted EdTech offerings from Canada, Mexico, and China.
I do not know the answer in terms of Chinese EdTech providers, but in terms of Canada and Mexico, the answer appears to be no. And the reason is that the US-Mexico-Canada-Agreement (USMCA) from 2020 excluded digital goods. As summarized at Norton Rose Fullbright (NRT):
Digital goods are protected from the imposition of tariffs under CUSMA/USMCA. Article 19.3 of the agreement provides that neither Canada nor the US shall impose customs duties, fees or other charges on or in connection with the importation or exportation of digital products transmitted electronically, between a person in Canada and a person in the US. A digital product includes a computer program, text, video, image, sound recording, or other product that is digitally encoded, produced for commercial sale or distribution, and that can be transmitted electronically. The restriction under the trade agreement, however, does not prevent the imposition of GST/HST on digital goods.
