In an era marked by global unrest, regulatory complexities, and a shifting market landscape, companies must remain diligent in their trade compliance procedures and stay apprised of changes in the law.
TC Trade Alerts will serve as a central resource for identifying the policy changes, executive orders, and necessary information and context regarding government actions affecting international trade.
See below for more information on the last TC Trade Alerts. If you have any questions about how this affects your business, please don't hesitate to contact one of our attorneys.
Additional Resources
Trade Compliance Handbook | Checklists of Foreign Countries Subject to Sanctions | Our International Trade Practice
| TRUMP ADMINISTRATION TRADE ALERT – IMPORTS | |
| HEADLINE | Additional 10% Tariffs on Products of China and Hong Kong (Total of 20% tariffs from Feb. 1 EO) |
| DATE | 3 March 2025 |
| AGENCY | Department of Homeland Security, Customs and Border Protection (CBP); Trump Administration |
| STATUS | Additional 10% tariffs have been imposed on goods from China and Hong Kong (totaling 20% duties from Feb. 1 EO), entered or withdrawn from warehouse on March 4, 2025, (unless one proves that the goods were shipped prior to February 1, 2025) 2025-02293.pdf |
| EFFECTIVE DATE | 4 March 2025, 12:01 a.m. Eastern Time, except for items that were loaded onto a vessel at the port of loading, or in transit on the final mode of transport prior to February 1, 2025 and entered or withdrawn from warehouse for consumption before March 7, 2025. |
| BACKGROUND | On February 1, 2024 President Trump issued Executive Order 14195 imposing 10% duties on all goods from China and Hong Kong, effective February 4, 2025. |
| DETAILS | President Trump amended his previous Executive Order to
increase tariffs on products from China and Hong Kong from 10% to
20% citing that China "has not taken adequate steps to
alleviate the illicit drug crisis through cooperative enforcement
actions." As a result of this and the actions taken
against China in President Trump's first term, most goods from
China now have a minimum effective total duty rate in excess of
45%. This Executive Order has immediate effect. Therefore, all goods entered or withdrawn from warehouse for consumption after 12:01 am ET on March 4, 2025 will be subject to these duties. CBP Cargo Systems Messaging Service (CSMS) No. 64299816 published on March 3 provided additional guidance regarding the implementation of the new duties on products from China and Hong Kong, including: " EFFECT ON OTHER DUTIES. The additional duties apply in addition to all other applicable duties including antidumping and countervailing duties, Section 301 duties, Section 232 duties, taxes, fees, exactions, and charges other than previously announced exceptions for donations, information materials, and personal items in accompanied baggage. " CHAPTER 98. The additional duties will not apply to goods for which entry is properly claimed under a provision of Chapter 98 of the tariff schedule other than goods entered under heading 9802.00.80 (the additional duties apply to the value of the article assembled in China and Hong Kong, less the cost or value of such products of the United States) and subheadings 9802.00.40, 9802.00.50, and 9802.00.60 (the additional duties for these goods apply to the value of repairs, alterations, or processing performed (in China and Hong Kong)). " FOREIGN TRADE ZONE. For foreign trade zone products subject to each order, articles that are products of China or Hong Kong, other than "domestic status" eligible products defined in 19 CFR 146.43, entered after the effective date must be admitted as "privileged foreign status" as defined in 19 CFR 146.41, and upon entry for consumption will be subject to the increased duties in effect at the time of admittance into the foreign trade zone. " DRAWBACK. No drawback program relief (19 CFR parts 190, 191) is available with respect to the duties imposed. " DE MINIMIS. The de minimis exemption for imports valued under $800 (an administrative exemption from duty and certain taxes at 19 U.S.C. 1321(a)(2)(C)) continues to be available for articles that are otherwise eligible for the exemption, including eligible articles sent to the United States through the international postal network. China has announced that it will be imposing retaliatory tariffs of 15% against imports of chicken, wheat, corn, and cotton, and 10% against sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products. |
| BASIS | Executive Order 14195 and authorities incorporated by reference. |
| HTS/ PRODUCTS |
The initial 10% tariffs were implemented under HTS subheading 9903.01.20,
which was in effect from Feb. 4 – March 4 The now-20% tariffs are implemented under 9903.01.24, effective March 4, 2025 at 12:01 AM |
| COUNTRY | China |
| CITE | Further Amendment to Duties Addressing the
Synthetic Opioid Supply Chain in the People's Republic of China
– The White House Unpublished CBP Notice– Scheduled to be published in the Federal Register on March 6, 2025 Announcement of the Customs Tariff Commission of the State Council on Imposing Additional Tariffs on Certain Imported Goods Originating in the United States CSMS # 64299816; Related CSMS: 63988468, 63992482, 64045612, 64082249, 64018403, 64235342, 64196888 |
Summary
President Trump issued three executive orders that "impose, consistent with law, ad valorem tariffs on articles that are products of" 25% on products of Mexico, 25% on products Canada (except energy products, which are at a lower 10% rate), and an additional 10% on products of China as set forth in each order, under IEEPA and other authorities. These duties are effective Tuesday, February 4, 2025. There is no drawback or duty-free de minimis relief available for these duties, and they will apply on top of other applicable programs.
Products Affected
The executive orders cover "all articles" that are the product of Mexico, Canada, and China, "as defined by the Federal Register notice." The Secretary of Homeland Security is tasked with determining and publishing "the modifications necessary to the Harmonized Tariff Schedule of the United States (HTSUS) in order to effectuate this order consistent with law." This notice has not been published yet. While it is anticipated that these E.O.s will cover all products from each nation, with the exception of Canadian energy products, there are significant questions to be resolved. For example, if a Chinese item was excluded from the Section 301 tariffs, will it be subject to the tariffs under the February 1 E.O.? Similarly, does the E.O. apply equally to goods that originate in Canada or Mexico under the United States-Mexico-Canada Agreement (USMCA) as it does to goods that are substantially transformed in Canada or Mexico, but do not qualify as originating under USMCA?
Canadian "energy or energy resources," which are subject to a 10% tariff instead of the 25% tariff applicable to other Canadian products, are defined by reference to section 8 of the president's order on January 20, 2025, Declaring a National Energy Emergency to include "crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3)."
Application in Relation to Other Duties
The rates of duty established in each order are defined to be in addition to any other duties, fees, exactions, or charges applicable to such imported articles.
No drawback program relief (19 CFR parts 190, 191) is available with respect to the duties imposed pursuant to these orders.
Duty-free de minimis treatment under 19 U.S.C. 1321 is not available for the articles affected by the tariff action.
For foreign trade zone products subject to each order, articles that are products of Canada, other than "domestic status" eligible products defined in 19 CFR 146.43, entered after the effective date must be admitted as "privileged foreign status" as defined in 19 CFR 146.41, and upon entry for consumption will be subject to the increased duties in effect at the time of admittance into the foreign trade zone.
There is no indication as to whether goods that are entered pursuant to one of the provisions of Chapter 98 of the HTSUS would be exempt from these duties.
Retaliation Clause
Each order contains a retaliation clause reserving the right to "increase or expand in scope" the tariffs imposed by each E.O., should the country retaliate by imposing additional tariffs on U.S. goods. Canada and Mexico have already announced tariff retaliations are planned, with Canada specifying 25% additional duties would be imposed on C$30 billion of U.S goods as of February 4, and an additional C$125 billion in goods in three weeks, according to Prime Minister Justin Trudeau's announcement February 1. He stated the list of products would include "American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes ... major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more" as well as some "non-tariff measures" related to critical minerals, energy procurement, and other unspecified partnerships. See Transcript of Trudeau's response to U.S. tariffs on Canada, Global News, Posted February 1, 2025, 10:21 pm, available at https://globalnews.ca/news/10993376/trudeau-trump-tariffs-us-canaaada/.
Products Excluded and/or Exclusion Process
No product exclusions or exclusion process were announced.
Removal of Duties
The Secretary of Homeland Security is charged with consulting with several other cabinet secretaries and the attorney general regarding the emergency situation and is required to "inform the President of any circumstances that, in the opinion of the Secretary of Homeland Security," indicate the government of the tariffed country has taken "adequate steps" to alleviate the emergency that gave rise to the order. If the president determines sufficient action to stem the crisis has occurred, the tariffs will be removed. What constitutes "adequate steps" to justify removal is not defined.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
