On April 9, 2025, President Trump issued an Executive Order “Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment” (“the E.O.”) amending prior executive orders imposing “reciprocal tariffs” on all imports of foreign-origin goods pursuant to the President’s authority under the International Emergency Economic Powers Act (“IEEPA”). The E.O. announced partial relief from the new reciprocal tariffs for all U.S. trading partners, except for China, which will now be subject to a total tariff rate of up to 170%.
90-Day Pause on Country-Specific Tariff Rates
The E.O. amends President Trump’s prior “Liberation Day” order that imposed country-specific tariff rates on imported goods from a list of countries deemed to be the “worst offenders” with respect to their trade barriers. The country-specific tariff rates (e.g., 26% for India, 32% for Taiwan, 46% for Vietnam, etc.) have been paused for a period of 90 days and are now set to become effective on July 9, 2025. While the E.O. provides some temporary relief for these countries, it does not cancel all tariffs imposed by the Liberation Day order.
Importantly, as of April 10, 2025, all countries (except for China, Canada, and Mexico), including those originally subject to the country-specific tariff rates, are subject to a 10% blanket tariff rate for all U.S. imports, with certain limited exemptions. In addition, 25% tariffs on steel, aluminum, automotive imports remain in effect on all countries. However, the 10% blanket tariff does not stack on top of the 25% tariffs on covered steel, aluminum, and automotive products.
It should also be noted that goods imported from Canada and Mexico are not subject to the reciprocal tariffs announced on Liberation Day and modified by the E.O. on April 9th. Instead, imports from these countries are subject to 25% tariffs that went into effect on March 4, 2025, and implemented to combat the emergency related to fentanyl at the U.S.’s northern and southern borders pursuant to the President’s IEEPA authority. These 25% tariffs, which are not applicable to USMCA qualifying goods, are separate from the reciprocal tariffs announced on Liberation Day and are unaffected by the 90-day pause on reciprocal tariffs.
Increase in Tariffs on China
Tariffs on Chinese imports are not subject to the 90-day pause implemented for the other country-specific tariff rates. Instead, the E.O. announced an increase in the tariff rate for Chinese imports to 125%. The E.O. states that the tariff increase is in response to China’s imposition of an 84% tariff on all U.S.-origin goods imported into China. This is the second time that President Trump has increased tariffs on China since the original April 2 announcement of reciprocal tariffs.
In addition to the increase in the country-specific reciprocal tariffs on China, the E.O. also announced an increase to the tariff rate for de minimis imports from China. Imports that would otherwise qualify for de minimis duty-free treatment and sent via the “international postal network” are now subject to the following duty rates, effective May 2, 2025:
- ad valorem duty of 120% of the value of the postal item; or
- specific duty of $100 per postal item (increasing to $200 on June 1, 2025)
Chinese Duties – Adding Up
Imports of Chinese goods into the U.S. are now subject to a total tariff rate of up to 170%. This total is based on several different tariff actions implemented under various legal authorities. The below points provide some quick math on how Chinese tariffs are adding up:
- Reciprocal Tariffs – 125% tariff on all Chinese imports, effective April 10, 2025, addressing unfair trade barriers based on President’s IEEPA authority;
- IEEPA/Fentanyl Tariffs – 20% tariff on all Chinese imports, effective March 4, 2025, (increased from 10% effective February 4, 2025), addressing the “influx” of opioids, including fentanyl, from China pursuant to the President’s IEEPA authority;
- Section 301 Tariffs – 25% tariff on most imports of Chinese-origin goods, initially implemented in 2018 to combat adverse Chinese trade practices pursuant to Section 301 of the Trade Act of 1974.
Due to the multiple rounds of tariffs that President Trump has issued against China in the past two months, it is important to understand that Section 232 Tariffs imposing 25% tariffs on steel, aluminum (effective March 12, 2025), and automobile/auto part imports (effective April 3, 2025) are cumulatively applied to the IEEPA/Fentanyl Tariffs and Section 301 Tariffs but not the Reciprocal tariffs.
Conclusion
As this most recent tariff modification shows, the tariff environment remains extremely fluid and unpredictable. Careful monitoring of White House updates, as well as retaliatory tariff actions implemented by U.S. trading partners, is essential during this time of trade volatility. Importers should ensure that internal compliance processes are in place to address arising risks and identify red flags associated with potential tariff evasion or other illicit practices business partners may enact when seeking to mitigate the impact of increased global tariffs.
