On April 9, 2025, President Trump signed an Executive Order that:
- Increases the reciprocal tariff announced last week for Chinese products (including products of Hong Kong and Macau) to 125%, effective as of 12:01 a.m. EDT on April 10, 2025;
- Pauses the high reciprocal tariffs on other specific countries, leaving those countries (except China) with a 10% tariff rate through July 9, 2025;
- Substantially increases fees on the entry of de minimis low-value shipments from China; and
- Maintains the exemption from tariffs for USMCA-compliant goods from Canada and Mexico.
Background
On April 2, 2025, the President announced the imposition of reciprocal tariffs on goods imported into the United States from a broad range of countries at an initial 10% rate. Higher rates for specific countries were identified in Annex I of the April 2 Executive Order, including a 34% duty rate for China. These tariffs went into effect on April 5, 2025, and were then scheduled to increase for a subset of countries on April 9, 2025 according to Annex III of the April 2 Executive Order.
In reaction to China’s retaliatory actions, on April 8, 2025, the President issued another Executive Order increasing the tariff rate on imports from China to 84%, and increasing fees on low-value, de minimis shipments from China to the United States. As China’s retaliations continued, on April 9, 2025, President Trump issued an additional Executive Order further increasing the tariff rate on imports from China to 125% as well as increasing duties and fees imposed on low-value shipments from China.
With respect to other countries, the President’s April 9 Executive Order instituted a 90-day pause on all reciprocal tariff rates on countries that were higher than 10% – bringing them all to a uniform 10%. This was done in recognition of the fact that these countries refrained from taking retaliatory measures against the United States.
The April 8 and April 9 Executive Orders did not otherwise affect the April 2 reciprocal tariff Executive Order and left all preexisting exclusions from those duties in effect.
Key Takeaways
- USMCA-compliant goods from Canada/Mexico remain unaffected by any reciprocal tariffs. However, non-USMCA-compliant goods of those countries are subject to preexisting tariffs of 25% (or 10% for energy products and potash from Canada).
- No reciprocal tariffs apply to goods, including Chinese goods, classified in tariff provisions that are subject to preexisting Section 232 duties on steel/aluminum and automotive goods.
- No reciprocal tariffs apply to goods, including Chinese goods, classified in tariff provisions listed in Annex II to the April 2 Executive Order.
- Regardless of whether they are subject to the reciprocal tariffs, Chinese goods remain subject to the February 4 and March 4 20% fentanyl-related tariffs imposed on China, Section 301 tariffs, and any standard import duties applicable to individual tariff codes.
- The grace-period exemptions from the reciprocal tariffs remain effective:
- Chinese goods that were loaded onto a vessel at the port of loading and in transit on their final mode of transit to the United States as of 12:01 EDT on April 9 are not subject to the 125% tariff, so long as they arrive in the United States by May 27, 2025.
- However, goods of all affected countries that were loaded onto a vessel at the port of loading and in transit on their final mode of transit to the United States after 12:01 EDT on April 5, but before the time specified on April 9, will be subject to a 10% reciprocal tariff.
The April 9, 2025 Executive Order also makes certain changes with respect to the de minimis treatment of low-value shipments from China. Current U.S. law authorizes duty exemptions, as well as fewer reporting requirements, for certain import shipments with an aggregate value of $800 or less. The exemption is most typically used in the context of direct-to-consumer e-commerce shipments. Last week, in an Executive Order separate from the reciprocal tariffs order, President Trump required such shipments from China/Hong Kong to pay all applicable duties that would affect a higher value shipment, effective May 2, 2025. The April 9 Order increases the tariff rates for such goods that are sent through the international postal network to a tariff of 120% of product value or $100 per postal item until June 1, 2025, when this amount will rise to $200 per postal item.
We further note that China has responded to the U.S. action through various measures, including initially raising duties on all U.S. goods to 84% (with a subsequent increase to 125% announced on April 11) as well as a series of export controls measures restricting exports of critical minerals and materials to the United States.
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