What Happened This Month In International Trade - May 2025

Administration

• President Trump signed an Executive Order reducing the reciprocal tariff on China from 125% to 10% for 90 days.
• The US & UK reached atrade deal, allowing the import of UK aerospace engines and parts duty-free. The average tariff on U.K. goods will stay at 10%.

Customs and Border Protection (CBP)

• CBP released their April 2025 monthly update. Highlights:
• • Successfully implemented tariffs guided by 21 presidential actions
  • Identified $117 million in duties and fees owed to the U.S. government
  • Stopped 140 shipments for further examination based on the suspected use of forced labor
• CBP released a notice outlining refund procedures to implement President Trump's executive order on tariff stacking.
• CBP updated itsSection 232 tariff FAQ clarifying that an exemption from reciprocal tariffs for goods subject to Section 232 tariffs only applies if duties are "owed and payable."

Court of International Trade (CIT)

• On May 28, the CIT ruled against President Trump's imposition of worldwide tariffs through the International Emergency Economic Powers Act ("IEEPA"). The CIT imposed a permanent injunction against the imposition of both reciprocal and fentanyl IEEPA tariffs. The ruling was stayed by the U.S. Court of Appeals for the Federal Circuit.
• The CIT entered a $3M+ default judgment against an importer and its owner for falsely declaring the country of origin for their Chinese products.
• The CIT held that a product is "imported" for duty drawback purposes when it's admitted into a foreign-trade zone and not when entered for domestic consumption.

Department of Commerce

• Commerce published a federal register notice establishing a process to reduce Section 232 tariffs on vehicles. In the notice, Commerce suggested that automakers will be able to save about $10 billion annually on USMCA-qualifying vehicles imported from Canada or Mexico by submitting documentation to the International Trade Commission about the U.S. content in those vehicles.

Bureau of Industry and Security (BIS)

• BIS announced that the agency is rescinding the Biden Administration's AI Diffusion Rule stating that the requirements would have stifled American innovation.

Department of Justice (DoJ)

• A Chinese company and three Chinese nationals were charged with illegal importation of pill-making equipment used to manufacture controlled substances.

U.S. Department of Agriculture

• The USDA's Animal and Plant Health Inspection Service (APHIS) suspended the import of live cattle, horse and bison at U.S. ports of entry along the Mexico border because of the detected spread of the new world screwworm.

Federal Maritime Commission (FMC)

• The FMC launched an investigation on whether the vessel flagging laws, regulations or practices of foreign countries or shipowners are creating unfavorable shipping conditions for the United States.

Congress

• The House Ways and Means Committee passed the tax cut bill on May 14. The bill mainly concerns income taxes but also ends de minimis for all commercial shipments on July 1, 2027. The bill also limits the use of drawback when exporters of U.S.-manufactured tobacco products file drawback claims for imported products that paid tobacco excise taxes.
• The Congressional Budget Office released an estimate stating that if de minimis ends for all imports in July 2027, as proposed in the tax bill currently being considered in the House of Representatives, the U.S. Treasury would collect an additional $5.2 billion in the first full fiscal year after the change.
• House Representative Rosa DeLauro and Senator Elizabeth Warren sent a letter to President Trump asking the administration to share more information about their negotiations with countries.

Industry News

• The District Court for the District of Columbia struck down all tariff action taken under IEEPA. The Judge held that IEEPA does not include the power to impose tariffs and preliminarily enjoined the collection of the tariffs, but only from the plaintiffs in the case (two importers). The judge stayed the injunction for 14 days to give the government a chance to appeal to the U.S. Court of Appeals for the D.C. Circuit.
• U.S. shipments from China haveplunged, reaching a 2-decade low. Some retailers, including online marketplace giant Temu, have halted shipments entirely from China.
• A new report from Kharon suggests that a number of firms on the Uyghur Forced Labor Prevention Act (UFLPA) Entity List are establishing new subsidiaries that provide alternate logistical routes to keep their goods moving into global supply chains.

International News

• In an effort to reduce illegal transshipment of goods to the U.S., Malaysia's Ministry of Investment, Trade & Industryannounced it will be the only entity capable of issuing non-preferential certificates of origin for Malaysian shipments destined to the U.S.

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