President Trump issued an executive order April 2 imposing additional tariffs at varying rates on imports from all countries. These tariffs will take effect within the next few days.
Tariffs
The U.S. will levy an additional 10 percent tariff on all imports from all trading partners, effective with respect to goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on April 5. However, this tariff will not apply to goods that are (1) loaded onto a vessel at the port of loading and in transit on the final mode of transit before that time and (2) entered or withdrawn from warehouse for consumption after that time.
However, several dozen countries (complete list here) will be subject to additional tariffs of 11-50 percent, including the following.
- 49 percent for Cambodia
- 48 percent for Laos
- 46 percent for Vietnam
- 37 percent for Bangladesh
- 34 percent for China
- 32 percent for Taiwan
- 32 percent for Indonesia
- 32 percent for Switzerland
- 31 percent for South Africa
- 27 percent for India
- 26 percent for South Korea
- 24 percent for Japan
- 20 percent for the European Union
These higher tariffs will be effective with respect to goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on April 9. However, they will not apply to goods that are (1) loaded onto a vessel at the port of loading and in transit on the final mode of transit before that time and 92) entered or withdrawn from warehouse for consumption after that time.
The additional tariffs will be assessed in addition to any other applicable duties, fees, taxes, exactions, or charges and will remain in place until the president determines that “the underlying conditions described [in the EO] are satisfied, resolved, or mitigated.”
According to the EO, the president may increase or expand in scope the additional tariffs if (1) they are deemed to not be effective in resolving the emergency conditions (e.g., a continued increase in the overall U.S. trade deficit or “the recent expansion of non-reciprocal trade arrangements by U.S. trading partners” in a manner that threatens U.S. economic and national security interests), (2) any trading partner retaliates through import duties on U.S. goods or other measures, or (3) U.S. manufacturing capacity and output continues to worsen.
On the other hand, the tariffs may be decreased or limited in scope if any trading partner “takes significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters.”
Goods from Canada and Mexico are exempt from reciprocal tariffs until such time as the IEEPA Border tariffs are terminated or suspended, at which time only USMCA qualifying goods will be exempt from these tariffs and non-USMCA goods will be subject to a 12% reciprocal tariff.
Exclusions
The EO specifies that the additional tariffs will apply only to the non-U.S. content of a subject article provided that at least 20 percent of the article’s value is U.S.-originating. “U.S. content” refers to the value of an article attributable to the components produced entirely, or substantially transformed in, the U.S. The EO authorizes U.S. Customs and Border Protection to require the collection of such information and documentation regarding an imported article, including with the entry filing, as is necessary to enable it to ascertain and verify (1) the value of the U.S. content of an article and (2) whether an article is substantially finished in the U.S.
The EO excludes the following from the additional tariffs.
- all articles encompassed by 50 USC 1702(b) (e.g., communications, donations, and informational materials)
- all articles and derivatives of steel and aluminum already subject to Section 232 duties
- all automobiles and automotive parts already subject to Section 232 duties
- copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products
- all articles from a trading partner subject to Column 2 duty rates
- all articles that may become subject to duties pursuant to future Section 232 actions
De Minimis
The EO states that duty-free de minimis treatment will remain available for all goods subject to the increased tariffs (except those imported from China) until the commerce secretary notifies the president that adequate systems are in place to “fully and expeditiously process and collect” revenue from these tariffs for articles otherwise eligible for de minimis treatment.
Authority
The tariff increases are being imposed under the International Emergency Economic Powers Act following the EO’s declaration of a national emergency with respect to the “unusual and extraordinary threat” to U.S. national security posed by “underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits.” According to the EO, these deficits reflect “asymmetries in trade relationships” that (1) have contributed to the atrophy of domestic production capacity, especially that of the U.S. manufacturing and defense-industrial base, and (2) impact U.S. producers’ ability to export “and, consequentially, their incentive to produce.”
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