On April 2, 2025, the proclaimed tariff “Liberation Day,” President Trump announced his “reciprocal tariffs” actions from the Rose Garden at the White House. Invoking his authority under the International Emergency Economic Powers Act of 1977 (“IEEPA”), the following tariff plans are aimed to “address the national emergency posed by the large and persistent trade deficit.”
First, President Trump is imposing a 10 percent “baseline” tariff on goods imported from all countries. This will take effect April 5, 2025 at 12:01 a.m. EDT.
Second, President Trump is imposing “discounted reciprocal tariffs” on individual countries with which the United States has the largest trade deficits. All other countries will continue to be subject to the 10% tariff baseline. These tariffs will take effect April 9, 2025 at 12:01 a.m. EDT. A full list of countries and their respective reciprocal tariffs is here. The reciprocal tariffs are in addition to any other duties applicable to such articles. For example, the reciprocal tariff rate on China is 34 percent, which will be added to the existing 20 percent tariff imposed under IEEPA and any applicable Section 301 tariffs (either 7.5 percent or 25 percent), resulting in a potential total “true” tariff rate of 79 percent against goods imported from China, assuming no additional applicable duties such as antidumping or countervailing duties.
The following products will not be subject to these reciprocal tariffs:
- articles subject to 50 U.S.C. § 1702(b), which covers various informational materials, humanitarian articles, and other items, the regulation of which are outside the scope of the President’s authority under IEEPA (this exception is unlikely to be applicable to most importers);
- copper, pharmaceuticals, semiconductors, and lumber articles (these are articles that are subject to ongoing Section 232 investigations or that have been reported to be future targets of sectoral tariffs);
- energy, energy products, and certain critical minerals that are not available in the United States;
- steel/aluminum articles and automobiles and automotive parts already subject to Section 232 tariffs;
- all articles that may become subject to future Section 232 tariffs; and
- bullion.
With respect to Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect and are unaffected by the reciprocal tariffs. Therefore, goods compliant with the United States–Mexico–Canada Agreement (“USMCA”) will continue to enjoy a tariff exemption, while non-USMCA compliant goods will see a 25 percent tariff, and non-USMCA compliant energy and potash will see a 10 percent tariff. However, in the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12 percent reciprocal tariff.
Importantly, the duties established by this order shall apply only to the non-U.S. content of a subject article, provided at least 20 percent of the value of the subject article is U.S. originating. U.S. Customs and Border Protection (“CBP”) has been authorized to collect information and documentation regarding the value of the “U.S. content” in an imported article. Importers should start to assess the value of “U.S. content” in their imported articles and consider methods of documenting such information with their suppliers to take advantage of this aspect of the order.
It is further reported that the Administration is presently focused on implementing the tariff regime instead of negotiating with partners to lower their respective reciprocal tariffs.
