(PRESS RELEASE) On April 2, 2025, President Trump signed an Executive Order (EO) imposing global reciprocal tariffs on all imports into the United States. The following FAQ addresses key questions about these new tariffs.
Q1. When do the new tariffs go into effect and at what rate?
A. All goods regardless of country of origin entered into the U.S. after 12:01 a.m. EDT on April 5 will be subject to a 10 percent “reciprocal” tariff. This will be in addition to any regular tariff or other special tariff currently being assessed on the product, unless excluded as discussed below.
Goods imported from a country listed on Annex I to the EO that are entered into the U.S. after 12:01 a.m. EDT on April 9 will graduate from the 10 percent rate to the higher specific country reciprocal rate set out on Annex I. For example, the higher reciprocal rates for the following countries or regions that go into effect on April 9th are:
- 34 percent on Chinese origin goods
- 20 percent on goods that originate in an EU country
- 46 percent on Vietnamese origin goods
- 32 percent on Taiwanese origin goods
- 24 percent on Japanese origin goods
- 26 percent on Indian goods
- 25 percent on South Korean goods
- 36 percent on Thai origin goods
- 31 percent on Swiss origin goods
- 32 percent on Indonesian origin goods
- 24 percent on Malaysian origin goods
- 49 percent on Cambodian origin goods
Please review Annex I for the other countries that are assigned higher reciprocal tariff rates. All other countries will remain at the 10 percent rate.
Q2. What about goods that are in transit?
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A. Goods that are on a vessel at the port of loading or in transit on the final mode of transit before 12:01 a.m. EDT on April 5 and which are entered for consumption into the U.S. or withdrawn from warehouse after 12:01 a.m. EDT on April will not be subject to the 10 percent retaliatory duties. Likewise, goods that are on a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. EDT on April 9 and which are entered for consumption or withdrawn from warehouse into the U.S. after 12:01 a.m. EDT on April 9 will not be subject to the country-specific rate.
Q3. Are the reciprocal tariffs assessed on top of other tariffs?
A. Yes, with some exceptions. The reciprocal tariff, whether at 10 percent or at a higher country-specific rate, are in addition to any “regular” duties on the imported goods, any existing China section 301 duties, and the 20 percent China duties implemented earlier this year pursuant to the International Emergency Economic Powers Act (IEEPA).
The reciprocal tariffs are not cumulative on products that are subject to section 232 tariffs—the 25 percent duties assessed on steel and aluminum products (and certain derivatives) or the 25 percent duties on automobiles and automobile parts. For those products, there are no reciprocal tariffs, only the section 232 duties.
Q4. What about goods from Canada or Mexico?
A. The EO did not change the status of goods from Canada or Mexico. Thus, if a product from Canada or Mexico qualifies as originating for purposes of the United States-Mexico-Canada Free Trade Agreement (USMCA), then it remains duty-free, and not subject to either the 25 percent tariff on Canadian and Mexican goods imposed earlier this year, or the 10 percent reciprocal tariff—neither Canada nor Mexico were assigned country-specific reciprocal tariff rates. If, however, the product originates in Mexico or Canada but does not qualify as originating under the USMCA, then the product remains subject to the 25 percent tariff on nonqualifying Mexican and Canadian products.
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Q5. What happens if my importation contains some U.S. origin material?
A. If your imported product contains 20 percent or more U.S. origin material, then only the foreign origin content will be subject to the reciprocal tariff. If the U.S. content is less than 20 percent, then 100 percent of the imported good will be subject to the reciprocal tariff.
Q6. How are foreign trade zone entries and drawback entries handled?
A. Foreign trade zone (FTZ) entries are being handled the same way they have been handled in the previous 2025 IEEPA tariffs. Unless the good is eligible for FTZ admission under “domestic status” it must be admitted as “privileged foreign status.” This applies to merchandise admitted into a FTZ on or after 12:01 a.m. EDT on April 9, 2025.
As for drawback entries, unlike the EOs from earlier this year, which specifically stated that drawback could not be claimed on the 2025 China, Mexico and Canada IEEPA tariffs, this EO makes no mention of drawback. We expect this could be clarified once the Federal Register notice is published.
Q7. Can we still use the de minimis shipment process?
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A. It depends on the origin of the goods. For goods originating from any country other than China, then duty-free de minimis treatment for shipments $800 and less remains available for article subject to the reciprocal tariffs. This privilege will sunset once a system is in place to process and collect the duty revenue associated with such shipments. That system is being designed currently.
Products from China, however, lose the right to utilize the de minimis treatment on May 2, 2025. Thereafter, such goods will be subject to the requirements subject to goods subject to formal entry, meaning a tariff classification will need to be identified for the good, duty will be deposited, and a bond will need to be posted to ensure duty payment.
Q8. Are the reciprocal duties capped?
A. No. President Trump reserved the right to increase the reciprocal rates if the situation warranted it, meaning that the tariffs have not cured the balance of trade problem. Also, the EO states that the rates could be raised if foreign countries were to implement retaliatory duties against U.S. origin goods.
The Vision Council will keep its members up to date on this very fluid situation. If you have any questions about this alert or the topic, please contact Rick Van Arnam, The Vision Council’s Regulatory Affairs Counsel, at rvanarnam@barnesrichardson.com.
We are working to update the Tariff cost breakdown pdf with the updates for China, Canada and Mexico information and will make that available to members on the website as soon as possible.
