On April 4th, the Government of the United States imposed a universal 10% tariff on all imports into the U.S. from outside of North America, effective 12:01 a.m. ET on April 9, irrespective of origin.
Along with those tariffs, imports from a targeted list of approximately 60 countries were to be tariffed at varying, higher rates. Those higher rates have now been put on pause for a period of 90 days, effective 12:01 a.m. ET, April 10, 2025, to allow the U.S. administration to negotiate with each individual country that seeks to negotiate new trade terms with the United States.
China
The exception to this policy is China, which will see its tariff rate now spike to 125%. It is important to understand the tariffs against China-origin goods are stackable tariffs, meaning they are imposed in addition to, not in place of, existing tariffs.
To recap, the current tariffs on China-origin goods are summarized as follows:
- Standard Most-Favored Nation (MFN) tariff (varies by product)
- 7-25% tariffs (in rare cases 100% tariffs) imposed in phases over the course of 2018 on most (not all) China-origin goods
- 10% tariff imposed under the International Emergency Economic Powers Act (IEEPA), effective February 3, 2025
- 10% tariff imposed under IEEPA, effective March 4, 2025
- 84% imposed under IEEPA, effective April 9, 2025
- 41% imposed under IEEPA, effective April 10, 2025
This means the combined tariffs against China-origin goods could be more than 170% (in rare cases even higher).
Impact on low-value goods originating in China and Hong Kong
Effective 12:01 a.m. ET on May 2, 2025, goods that fall within the $800 de minimis threshold that originate in China or Hong Kong, and that are transported into the U.S. via courier, will be subject to all applicable duties.
Low-value goods that enter the U.S. through postal service will be subject to a tariff rate of 90%, or a fee of $75 per package ($150 after June 1, 2025) in instances where the value of the product is not listed. In addition, U.S. Customs and Border Protection (CBP) may, at its discretion, require a formal Customs entry for goods entering the U.S. from China or Hong Kong through the international postal network. In the event a formal entry is required, the goods will be subject to the standard applicable duties, rather than the aforementioned 90% tariff rate or $75 package fee ($150 after June 1, 2025).
Impact on low-value goods (excluding China and Hong Kong)
The new tariffs of 10% or more will apply to all low-value shipments that fall within the de minimis threshold of $800. However, the application of these tariffs on low-value shipments will only take effect at a yet-undefined date in the future when the Department of Commerce has established an effective means of collecting duties on these items.
Impact on Canada and Mexico
Canada and Mexico will not be impacted by this latest tariff action as the U.S. government has already imposed tariffs of 25% on all goods originating in Canada and Mexico, save for energy products and potash, which are tariffed at 10%.
As such, the additional universal 10% tariff that came into effect on April 9, 2025, will not be applied to goods originating in Canada and Mexico until such time that the current 25% and 10% tariffs have been suspended or cancelled.
The 25% and 10% tariffs (on energy and potash) against Canada-origin and Mexico-origin imports into the U.S. is waived when the imports qualify for duty exemption under the United States-Canada-Mexico Agreement (USMCA).
Calculation of duties
The aforementioned duties of 10% or more will be applied only to the non-U.S.-originating portions of the imported product, provided the U.S.-originating portion makes up 20% or more of the product’s total value.
This will be particularly important for importers with globally integrated supply chains that make use of a mix of U.S. and foreign production facilities to manufacture components of their goods.
Exemptions
The newly introduced reciprocal tariffs will be eligible for duty drawback. In addition, a small number of products have been exempted from these tariffs, including:
- Automobiles (which have a separate, universal tariff of 25% applied), effective 12:01 a.m. ET on April 3, 2025
- Automobile parts (which will have a separate, universal tariff of 10% applied), effective 12:01 a.m. ET on May 3, 2025
- Steel and aluminum products
- Steel and aluminum derivatives
- Other products, including copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products
Impact on Customs bonds
The implementation of a 25% tariff may push importers’ duty outlay beyond the value of their current customs surety bond. It is important to understand the impact of these tariffs to your customs surety and be proactive in addressing any surety shortfall. For more information, please click here.