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April 3rd - Date of the last update: April 10th
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US announces roll-out of reciprocal tariffs

Date of update: April 10th, 2025

Changes announced

On April 9, 2025, President Trump announced a number of changes to his reciprocal tariff policy that initially went into effect at 12:01 AM on April 9. The changes were as follows, effective 12:01 AM on April 10:
  • Reciprocal tariff on Chinese imports would be increased to 125%.
  • Country specific reciprocal tariffs (identified in Annex 1 of the Executive Order 14257) would be paused for a period of 90 days, until July 9, 2025. Tariffs for these countries would be rolled back to 10%.
  • •US CBP has issued an updated CSMS message 64701128 that creates 2 simplified tariff classifications to report and pay the reciprocal tariffs.
  • As with previous tariff announcements, these tariffs are in addition to all other tariffs that apply. Exemptions/exclusions that were stated in the original Executive Order in Annex II remain in effect.
  • The Administration has indicated that negotiations with individual countries will continue so we can expect that ongoing uncertainty surrounding tariffs will continue indefinitely.
Date of publication: April 3rd, 2025
On April 2, 2025, President Trump announced the roll-out of his reciprocal tariffs. This latest tariff approach is one of many implemented since he took office. The reciprocal tariffs result from what President Trump has stated is 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, constitute an unusual and extraordinary threat to the national security and economy of the United States.” The tariffs will be authorized under the International Emergency Economic Powers Act (IEEPA).
Prior to the announcement, the USTR published its 2025 National Trade Estimate Report, which includes a report on foreign trade barriers. This report was indicated as a proof source for determining which countries received additional tariffs, although there has been speculation that the final tariffs may have been determined a variety of ways, or just generally based on trade imbalances and average tariffs by country.
This article is based on what has been announced as of time of publication. Note that we expect that there could be further clarifications and updates once the Federal Register Notice and CBP CSMS are published.

The tariffs

The ad valorem tariffs will be implemented with a dual approach:
  1. Creation of an additional 10% baseline tariff on all imports from all countries. This will start at 12:01 am on April 5, 2025, unless such goods were "loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 am EST on April 5, 2025."
  2. Country specific tariffs on approximately 60 countries, starting at 12:01 am on April 9, 2025. A snapshot of the country list and applicable tariffs is shown below. For a complete list of countries, refer to Annex I of the Executive Order (EO).
The additional tariffs shown in the chart (labeled as the "discounted reciprocal tariffs”) include the 10% baseline tariff. For example, the reciprocal tariff for China shows as 34%, which is the 10% base tariff that enters into effect on April 5th plus the 24% China specific reciprocal tariff that enters into effect on April 9th. There has been some confusion as to whether the reciprocal tariffs included the baseline 10% or were in addition to it. As of late yesterday, media reports from the White House indicated that the 10% was included, but until we receive the final Federal Register Notice, this can not be fully confirmed. Based on current assumptions, the 10% tariff will be applied to all imports starting on April 5th. Starting April 9th, U.S. importers will need to pay the country specific tariffs shown in the country specific reciprocal tariff chart.
It should be noted that the tariffs rates announced are in addition to any existing duties, taxes, fees or applicable charges for importer articles. That would include the current item’s normal duty rate, plus any applicable Section 301, 232 and/or IEEPA duty rates. As with prior actions, this is a layered approach. For example, a product imported from China could have a normal duty rate of 10% + a Section 301 tariff of 25% + 20% tariff from IEEPA + 34% reciprocal tariff, for a total of a 89% duty.
As with previous tariff announcements, the EO requires articles subject to the new reciprocal tariffs to be entered into any foreign trade zone in "privileged foreign status". However, unlike other recently created tariffs, this EO does not mention duty drawback availability. With the publication of the Federal Register Notice, we will hopefully confirm if the omission was intentional.
De Minimis is still available (with the exception of China) which will have that option removed under the Executive Order also issued April 2, closing that loophole.
These country-specific ad valorem rates of duty shall apply to all articles imported pursuant to the terms of all existing U.S. trade agreements, except as provided in the exemptions.
These additional ad valorem duties shall apply until such time as President Trump determines that the underlying conditions are satisfied, resolved, or mitigated.

Exemptions

The EO does provide for a number of exemptions and those are further spelled out in Annex II. The Executive Order states that the following goods are not subject to the new reciprocal (including 10% baseline) tariffs:
  • All articles that are encompassed by 50 U.S.C. 1702(b); this includes items such as donations, informational materials, accompanied baggage, etc.
  • All articles and derivatives of steel and aluminum subject to the duties imposed under Section 232, as amended under Proclamation 10895 of February 10, 2025 (Adjusting Imports of Aluminum into the United States), and Proclamation 10896 of February 10, 2025 (Adjusting Imports of Steel into the United States).
  • All automobiles and automotive parts subject to the additional section 232 duties as amended in Proclamation 10908 of March 26, 2025 (Adjusting Imports of Automobiles and Automobile Parts into the United States).
  • Other products identified in Annex II, including copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products.
  • Articles from countries subject to the Column 2 duty rates in the HTSUS (North Korea, Cuba, Belarus, Russia).
  • All articles that may become subject to duties subject to future actions under section 232.

Exemptions for Canada and Mexico

Canadian and Mexican USMCA origin/eligible goods can continue to enter the US under the applicable USMCA preferential duty rate. In contrast, other free trade eligible goods (e.g., those from S. Korea, Australia, etc.) are subject to the reciprocal tariffs.
Canadian and Mexican origin goods that are not USMCA origin/eligible, will be subject to the 25% tariff (or 10% tariff for energy or energy resources and potash). These are the tariffs related to stopping the flow of fentanyl at the northern and southern borders. If those EOs terminate or be suspended, then Canadian and Mexican origin goods not USMCA origin/eligible will be subject to an additional tariff of 12%. However, in this case, the following goods will still be exempt:
  • USMCA Canadian and USMCA Mexican origin goods
  • Energy or energy products resources
  • Potash
  • "Articles eligible for duty-free treatment under USMCA that is a part or component of an article substantially finished in the United States"

Goods with US content

The EO on reciprocal tariffs did provide for a partial exemption for goods that contain “US content.” The good must have at least 20% US content, at which point the applicable 10% baseline or country specific tariff will be applied to the non-US content. "US content" is defined in the EO as "components produced entirely, or substantially transformed in, the United States." The EO leaves the type of proof that will be required to substantiate the US origin of a component to CBP's discretion.

Conclusion

The EO continues the trend we are seeing with ongoing uncertainty regarding the use of tariffs by the Trump Administration. As we have seen with previous actions, the EO allows for future modifications if:
  • The tariffs are not effective in changing the trade deficit for a given country.
  • Retaliation by other countries.
  • Other countries take measures that Trump believes remedy the perceived trade imbalance; and align on economic and security measures.
  • US manufacturing capacity and output continue to worsen.
To learn more about how the ONESOURCE Global Trade suite of tools and services can help businesses analyze potential impacts, explore alternative sourcing options, and optimize their trade operations to mitigate risks and capitalize on potential advantages, please contact your Account Manager or Customer Success Manager.