US-China tariff adjustments and what they mean for trade compliance

Key executive actions and their impact

Background:
The US previously declared a national emergency due to the perceived failure of the PRC to control the influx of synthetic opioids, including fentanyl, into the United States. This led to an initial imposition of a 10 percent
ad valorem
duty on certain PRC products, which was subsequently increased to 20 percent.
Recent change:
Following discussions and commitments from the PRC to take significant measures to curb fentanyl flow (including stopping designated chemical shipments to North America and controlling other chemical exports globally), the US issued an Executive Order committing to
reduce the additional
ad valorem
rate of duty from 20 percent back to 10 percent.
This reduction is effective November 10, 2025.
Implementation:
Subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) will be modified, specifically heading 9903.01.24 and subdivision (u) of U.S. note 2, to reflect the 10 percent rate.
Compliance implications:
Companies importing products from the PRC that were subject to the higher 20 percent
ad valorem
duty under Executive Order 14195 should prepare for the adjustment to 10 percent effective November 10, 2025. This necessitates updating classification tools, duty calculations, and internal systems to reflect the new rate. Continued monitoring by the Department of Homeland Security on PRC commitments suggests that this rate could be subject to future adjustments if the PRC fails to uphold its end of the agreement.

Background:
This Executive Order stems from a broader concern over large and persistent annual U.S. goods trade deficits with the PRC, which were deemed an "unusual and extraordinary threat" to national security and economy. Previous Executive Orders had imposed and then suspended heightened
ad valorem
duties in response to these concerns and PRC retaliatory actions.
New arrangement:
Following a meeting between President Trump and President Xi Jinping on October 30th, a "historic and monumental deal" (Kuala Lumpur Joint Arrangement) was reached.
China commitments:
Key commitments include:
Postponing and effectively eliminating export controls on rare earth elements and other critical minerals for one year.
Stopping the shipment of certain designated [precursor] chemicals to North America and strictly control exports of certain other chemicals to all destinations in the world.
Suspension until December 31, 2026, of all the retaliatory tariffs that it has announced since March 4, 2025, including a large number of U.S. agricultural products (soybeans, sorghum, logs).
Extending its market-based tariff exclusion process until November 10, 2026.
Addressing retaliation against U.S. semiconductor manufacturers, including its antitrust, anti-monopoly, and antidumping investigations.
Purchasing significant amounts of U.S. agricultural exports (soybeans, sorghum, logs).
US commitments:
In response, the US has committed to
maintain the suspension of heightened reciprocal tariffs on imports from the PRC until 12:01 a.m. eastern standard time on November 10, 2026.
This means the current 10 percent reciprocal tariff will remain in effect during this period.
Implementation:
Heading 9903.01.63 and subdivision (v)(xvii)(10) of U.S. note 2 to subchapter III of chapter 99 of the HTSUS will remain suspended until November 10, 2026.
Compliance implications:
Importers dealing with products previously subject to these reciprocal tariffs should be aware of the continued suspension of the
heightened
duties, with the existing 10% reciprocal tariff remaining. This provides a degree of stability for planning until late 2026. The monitoring of PRC commitments by the Treasury, Commerce, and USTR highlights the potential for future tariff adjustments if the Arrangement's terms are not met.

Extension of Section 301 tariff exclusions:
Certain Section 301 tariff exclusions, previously set to expire on November 29, 2025, will be extended until
November 10, 2026
. This offers continued relief for specific goods.
Suspension Section 301 action on maritime/logistics:
The US will suspend for one year (starting November 10, 2025) the implementation of responsive actions related to the Section 301 investigation on China's targeting of maritime, logistics, and shipbuilding sectors. In return China will remove its retaliatory measures and “remove sanctions imposed on various shipping entities.”
BIS 50 percent rule
. The U.S. will suspend for one year, starting Nov. 10, 2025, the implementation of an interim final rule expanding export restrictions to many subsidiaries of entities under the "Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities". This rule has been in effect since Sept. 29, 2025.

Key takeaways for compliance professionals

Immediate action required (opioid-related duties):
Review product classifications and origin for items previously subject to the 20%
ad valorem
duty related to the synthetic opioid supply chain. Ensure systems are updated to reflect the
new 10% rate effective November 10, 2025.
Stability for reciprocal tariffs (for now):
The continuation of the existing 10% reciprocal tariff and the suspension of heightened duties until November 10, 2026, offers a window for strategic planning. However, constant vigilance is needed due to the monitoring mechanisms in place.
Review extended exclusions:
Identify if any of your imported products benefit from the extended Section 301 tariff exclusions and factor this into your landed cost calculations and sourcing strategies.
Stay informed on enforcement and monitoring:
The emphasis on ongoing monitoring by various US departments (Homeland Security, Treasury, Commerce, USTR) means that the stability offered by these agreements is conditional. Compliance professionals must remain abreast of any governmental pronouncements or
Federal Register
notices that indicate a re-evaluation of PRC commitments or potential re-imposition of higher duties.
Assess supply chain resilience:
The underlying tensions that led to these tariffs remain. While temporary relief and recalibrations are welcome, maintaining a resilient and diversified supply chain remains a critical long-term strategy.
Understand the nuances of executive orders:
These Executive Orders often delegate authority to specific agencies for implementation. Familiarize yourself with the roles of Homeland Security, Treasury, Commerce, and USTR, as they will be the primary points of contact for guidance and enforcement.

Conclusion