International Trade Remade – Liberation Day’s Reciprocal Tariffs and Trade Actions

On April 2, 2025, President Trump declared a national emergency with regard to imbalanced and nonreciprocal trade between the United States and its trading partners. President Trump announced that various tariff and non-tariff barriers have consistently disadvantaged American industry. Consequently, the President issued an executive order that imposes sweeping “reciprocal” tariffs of at least 10 percent beginning on April 5, 2025.¹ Beginning on April 9, the Reciprocal Tariffs Order establishes country-specific tariff rates for imports from countries with which the United States has a large and/or persistent trade deficit. The Reciprocal Tariffs Order was issued in tandem with an executive order further amending treatment of duty-free de minimis shipments from China (including Hong Kong and Macau) and requiring duties to be paid on all such shipments.² 

Reciprocal Tariff Policy and Tariff Imposition

The Reciprocal Tariffs Order explains that due to the economic emergency, the United States is now imposing an additional ad valorem duty on all imports from all trading partners with limited exceptions to balance trade and level the playing field.³ The duty covers all imports from all countries with a minimum initial rate of 10 percent.⁴ However, the duties imposed increase for each trading partner listed in Annex I to the Reciprocal Tariffs Order.⁵ These additional reciprocal duties shall apply until the President determines that the underlying conditions described in the Reciprocal Tariffs Order are satisfied, resolved, or mitigated.⁶ 

Regarding timing, the additional 10 percent duty shall apply to goods “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on April 5, 2025.”⁷ Notably, this will not cover goods “loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern daylight time on April 5, 2025, and entered for consumption or withdrawn from warehouse for consumption after 12:01 a.m. eastern daylight time on April 5, 2025.”⁸

Further, with certain enumerated exceptions, on April 9, 2025, all articles from trading partners identified in Annex I that are imported into U.S. customs territory shall be subject to the country-specific ad valorem rates of duty specified therein.⁹ As with the initial 10 percent tariffs, the higher rates shall apply to goods “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on April 9, 2025,” except that goods “loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern daylight time on April 9, 2025, and entered for consumption or withdrawn from warehouse for consumption after 12:01 a.m. eastern daylight time on April 9, 2025.”¹⁰ 

Importantly, with limited exceptions, these country-specific duties apply to all articles imported pursuant to the terms of all existing U.S. trade agreements. However, these duties currently do not apply to: 

• Goods listed in Annex II to the Reciprocal Tariffs Order, including copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products;
• Articles encompassed by 50 U.S.C. 1702(b);
• All articles and derivatives of steel and aluminum subject to the duties imposed pursuant to section 232 of the Trade Expansion Act of 1962;¹¹
• All automobiles and automotive parts subject to the additional duties imposed pursuant to section 232 of the Trade Expansion Act of 1962;¹²
• All articles from a trading partner subject to the rates set forth in Column 2 of the Harmonized Tariff Schedule of the United States (HTSUS);
• All articles that may become subject to duties pursuant to future actions under section 232 of the Trade Expansion Act of 1962; and
• Certain tariffs on specific goods with sufficient U.S. content.  

These rates are in addition to any other duties, fees, taxes, exactions, or charges applicable to such imported articles, except as stipulated by the Reciprocal Tariffs Order with respect to goods from Canada or Mexico. Those goods continue to be eligible for preferential treatment under the USMCA. However, goods from Mexico that do not qualify for such treatment remain subject to duties of 25 percent generally and 10 for certain energy goods. Further, any rate of duty on articles imported from Canada or Mexico is subject to complex carveouts under the terms of overlapping tariff actions, such as goods that have recently been subject to duties resulting from the America First Trade Policy.¹³ 

These rates are in addition to any other duties, fees, taxes, exactions, or charges applicable to such imported articles, except as stipulated by the Reciprocal Tariffs Order with respect to goods from Canada or Mexico. Goods admitted for entry to the United States from Canada and Mexico that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA), will not be subject to the 10 percent minimum tariff from the Reciprocal Tariffs Order. However, goods that do not qualify for USMCA preferential treatment are subject to duties of 25 percent generally and 10 for certain energy goods. Further, any rate of duty on articles imported from Canada or Mexico is subject to complex carveouts under the terms of overlapping tariff actions, such as goods that have recently been subject to duties resulting from the America First Trade Policy.¹³

Duty-Free De Minimis Treatment 

Additionally, on April 2 the President signed an executive order further addressing de minimis shipments, in which he stated that the Secretary of Commerce has informed POTUS that such systems are now in place to process shipments valued at less than $800.¹⁴ Accordingly, de minimis treatment for imports from China shall no longer be available beginning May 2, 2025.¹⁵ Rates for merchandise entered on or after May 2 will be subject to either a duty of 30 percent or a fee of $25-$50 per postal item containing goods for consumption. Further, CBP may require formal entry for any shipment that U.S. Customs and Border Protection determines does not qualify for de minimis treatment. Of note, any carrier that transports shipments under these provisions from the PRC or Hong Kong to the United States by any mode of transportation must have an international carrier bond to ensure payment of the duty regardless of whether de minimis or not. 

Conclusion 

The reciprocal tariffs are broad and serve as a floor for the tariff rate that applies to many imports. The Reciprocal Tariffs Order anticipates possible retaliation or insufficiency of tariff levels and includes a mechanism to increase or decrease the reciprocal tariff rates. If trading partners retaliate or if U.S. manufacturing capacity and output continue to worsen, the tariff rate(s) may increase. However, should any trading partner take significant steps to remedy non-reciprocal trade, including successful negotiations, the rate(s) may be adjusted lower. The actions under the Reciprocal Tariffs Order are joined by the Administration’s efforts to reduce unfair or nefarious misuse of the de minimis exclusion. These actions will impact broad swathes of the economy and force major decisions for supply chain configuration. In addition, further action is likely, so vigilance is especially needed. 

Buchanan has a team of international trade and national security attorneys, and government relations professionals ready to help U.S. manufacturers with U.S. trade remedy laws and trade policy. Our dedicated team has decades of experience supporting clients across a range of industries – ranging from steel, chemical, rubber, mining, and agricultural products – to ensure that the U.S. market is operating under fair and equal conditions.