On April 9, 2025, exactly one week after the announcement of his “Liberation Day” tariffs, President Trump issued a new Executive Order (“Modifying Reciprocal Tariff Rates to Reflect Trade Partner Retaliation and Alignment”) (the “Executive Order”) implementing a temporary 90-day pause on country-specific “reciprocal” tariffs, effective April 10, 2025, except tariffs imposed on China. Consequently, most countries’ products have reverted to the 10 percent “baseline” tariff initially effective April 5, 2025. Two days later, on a Friday evening, the President issued a Presidential Memorandum (“Clarification of Exceptions Under Executive Order 14257 of April 2, 2025, as Amended”) (the “Clarification Memorandum”) that exempts certain smartphones, laptops, and other electronics from these reciprocal and baseline tariffs, including the tariffs on Chinese goods. Both actions indicate that further tariff negotiations and adjustments may be forthcoming. We explore each of these topics below.
Temporary Suspension of Most Reciprocal Tariffs
The 90-day temporary suspension applies to goods that entered the U.S. for consumption, or were withdrawn from the warehouse for consumption, on or after 12:01 a.m. EDT on April 10, 2025, from the majority of countries that were previously subjected to reciprocal tariffs that briefly took effect on April 9, 2025. The Trump administration has emphasized that this pause is temporary and subject to ongoing evaluations and negotiations with U.S. trading partners. The temporary 90-day pause does not apply to the additional ad valorem 10 percent baseline tariff announced on April 2, 2025. As a result, since April 5, 2025, a 10 percent tariff continues to be assessed for almost all goods imported to the U.S. from most countries.
Imports from Canada and Mexico continue to be excluded from the baseline tariff, as the existing executive orders for tariffs on Canadian and Mexican imports from February 2025 and March 2025 remain in effect. This means that USMCA-compliant imports from Canada and Mexico will continue to enter the U.S. free of duty, while most other goods imported from either Canada or Mexico will continue to be subject to 25 percent tariffs. In addition, trading partners with which the U.S. does not have “normal trade relations” (i.e., imports from Belarus, Cuba, North Korea, and Russia) remain subject to special (typically higher) duties under applicable U.S. law and are not subject to the 10 percent baseline tariff.
China-Specific Tariffs
With respect to China, the Executive Order increased the reciprocal tariff on Chinese-origin goods to 125 percent, effective April 10, 2025. Therefore, except for items exempted from the reciprocal or baseline tariffs (such as items enumerated in Annex II of the President’s April 2 executive order (“Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits”), items subject to a Section 232 tariff, or goods qualifying for certain Chapter 98 special entry provisions), U.S. tariffs on most Chinese-origin goods are currently assessed at 145 percent, which includes the 20 percent tariff imposed by President Trump in March 2025.1 This amount does not include applicable standard “most favored nation” tariffs (as determined by Harmonized Tariff Schedule of the United States (HTSUS) classification) or applicable Section 301, antidumping, and countervailing duties—all of which can be significant.
In addition, rates for de minimis postal shipments from China were updated as follows:
- Ad valorem duty: 120 percent of the value of the postal item, or
- Specific duty: $100 per postal item.
These rates are effective May 2, 2025, and the applicable duty will continue to be determined by the carrier. The specific duty option will be increased to $200 per postal item on June 1, 2025. Carriers will determine monthly which duty they will impose and that selection will apply to all shipments brought in by that carrier.
New Exemptions
On April 11, 2025, President Trump issued the Clarification Memorandum that provides a list of certain products under the HTSUS that are exempt from the reciprocal and baseline tariffs under previous executive orders. The HTSUS codes listed in the memoranda include smartphones, computers, monitors, and various other electronic components. The complete list is as follows:
What’s Next
These most recent actions indicate that the Trump administration will continue to adjust its position based on reactions from its trading partners and other key stakeholders. While it is difficult to predict what may come next, we’ve outlined below some of the possible next steps:
- Industry-specific tariffs imposed on pharmaceuticals, semiconductors, and certain electronics. The Trump administration has indicated that all these items may be subject to upcoming executive orders imposing additional tariffs on these items. As evidence of that intent, the Commerce Department recently published notices requesting comments on separate Section 232 national security investigations of both (i) imports of pharmaceuticals and pharmaceutical ingredients and (ii) semiconductors and semiconductor manufacturing equipment. Meanwhile, President Trump's executive order directing the initiation of a Section 232 investigation covering critical minerals, semi-finished critical mineral products (e.g., semiconductor wafers), and finished critical mineral products (e.g., electric vehicles, batteries, smartphones, and microprocessors) suggests that the scope of products covered under that eventual action could widen. The administration has pointed to a desire for increased domestic manufacturing of these items as the justification for these additional tariffs. The pharmaceutical industry remains skeptical that increased tariffs on these pharmaceuticals will spur domestic manufacturing and instead points to the negative impact that these measures will have on the availability of affordable medications. We also could see additional industries come under scrutiny over time depending on U.S. domestic and foreign policy goals.
- Permanent rollback of “reciprocal” tariffs, particularly for trading partners that agree to concessions. On April 14, 2025, Treasury Secretary Scott Bessent indicated that the U.S. will prioritize trade deal negotiations with Australia, India, Japan, South Korea, and the United Kingdom. Reports indicate that negotiations with Vietnam are already underway.
- Perpetuation of the baseline 10 percent tariffs on all currently impacted countries. Regardless of the other changes that may be forthcoming, it seems likely that the baseline tariffs will remain in place indefinitely due to the significant revenues generated by these tariffs.
- Status quo on U.S. imports of intangible goods. We do not currently anticipate the imposition of U.S. tariffs on intangible goods. Historically, the United States has only applied tariffs to physical goods moving across borders and has not applied tariffs to purely electronic transfers such as software downloads or imposed any federal “digital services tax.” We believe a reversal of this longstanding U.S. policy is unlikely, particularly given the United States’ significant trade surpluses in digital services. However, it remains possible that this policy could change, particularly in response to any increase in digital service taxes by U.S. trading partners or other retaliatory measures.
As we’ve noted in our earlier alerts, even given the uncertainty of the current environment, affected parties can take the following next steps to evaluate their exposure to these tariffs and consider additional actions to mitigate their effects:
- Review your U.S. imports for country of origin (whether imported directly, transshipped from another destination, or withdrawn from a Foreign-Trade Zone) to ensure you are accurately identifying the correct country of origin.
- Review your valuation methods to ensure that value is being identified correctly. Tariffs are generally assessed as a percentage of the declared value, which means that accurately presenting customs valuation has become even more important.
- Check with your suppliers to determine how products you source are expected to be impacted by these tariffs and what duty rates apply to the affected items. Even if you are sourcing domestically, your suppliers may be sourcing inputs from these countries that are subject to tariffs that drive up their costs and your prices.
- Review your supplier and sales agreements for any terms that implicate responsibility for payment of tariffs (e.g., Incoterms).
- Consider whether any changes to your supply chain may be advantageous in the long term, recognizing that uncertainty exists about which countries and/or products may be targeted by tariffs in the future.
- Monitor rapidly arriving developments in this area, as the scope and timing of the tariffs are likely to change from the current proposals.
Overview of Tariff-Related Executive Orders Since January 20, 2025
[1]On April 8, 2025, in response to retaliatory tariffs imposed by China on U.S. imports, President Trump increased reciprocal tariffs against China from 36 percent to 84 percent (“Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports from the People’s Republic of China”) before subsequently increasing the reciprocal tariff to 125 percent in the Executive Order.
